MONEY GLOBE XProfessional Risk Management · Lesson 1
Volatility-based position sizing
Equal risk, not equal dollars
Professional - Gold & Platinum
In this lesson
Size positions so each one carries the same risk, using volatility (ATR) and volatility targets.
Key takeaways
- Equal dollars ≠ equal risk; volatile assets need smaller positions.
- Position size = money at risk ÷ stop distance (e.g. 2 × ATR).
- Volatility targeting: weight ≈ target volatility ÷ asset volatility.
- Re-size as volatility changes — risk, not position value, stays constant.
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Next lesson: Portfolio risk and correlation
Educational information only - not financial advice.