Adaptive✓ Mathematical
◆ The PatternNormalize position size by asset volatility
Different assets have different volatilities. A 100-share position in a 40 % vol stock carries far more risk than in a 10 % vol stock. Volatility sizing equalizes dollar-risk:
Shares = Target $ Risk / (N × ATR)
N is a multiplier (e.g. 2× ATR). The Turtle Traders famously used this approach. Each position contributes roughly equally to portfolio P&L variance.
// Volatility sizing — equal dollar-risk positions
Pattern bridge: ATR computation is explained in Indicators — ATR.