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How do you guys approach risk-sizing on positions when the volatility of the underlying is all over the map?
I'm still trying to nail down my risk management and one thing I'm struggling with is how to consistently size positions. When something like $BTC is swinging 5-10% in a day, applying a standard 1% portfolio risk based on a fixed stop-loss feels... inadequate. Do you adjust your position size dynamically based on recent ATR, or is there another method you find more robust for highly volatile assets without constantly resizing?
1 comments · 16 points
For high volatility assets, I definitely adjust position sizing based on ATR. A fixed stop-loss percentage across the board for something like BTC will either get you stopped out constantly or make your risk amount too large. Scaling position size to volatility makes more sense.