% Volatility Position Sizing model...

T

Trend Fader

Anyone here position or swing trade using Van Tharp's percentage volatility position sizing model....

What do you think are the benefits of using such a type of position sizing strategy over the percentage risk model?



--MIKE
 
THe best feature I can think of regarding the % volatility model is..

If you are using very tight stops.. like a %1 stop...then the volatility % model wont necessarily allocate all you funds to one position... because the % risk model would allocate all funds to one position if the actual stop loss is %1.

Although we want to maximize position size as much as possible... in reality allocating entire portfolio to one position is suicide for swing traders..


--MIKE
 
You must log in or register to reply here.
Back
Top