Annualised Price Volatility %

2021년 2월 9일

Annualised Price Volatility in percent, also called Instrument Risk, as outlined by Rob Carver in his excellent books, 'Systematic Trading' and 'Leveraged Trading'.
This is written for those who have read one of his books and want to use this tool on TradingView.

Trend strength, oscillators, and volume indicators are all the rage. Finding a great setup is, of course, key. You've decided to go long. Great!

But how much is your capital at risk?
How does that compare with your level of risk tolerance?

When trading, it's key to understand just how risky a certain instrument is. An uptrend is an uptrend, but is it at an annualised volatility of 2% per year or 500% per year? If it's the former, I know I can put a good chunk of capital into trading it. But if its the latter, I don't want to put so much money at risk. Volatility is rarely in a straight line. It's usually up and down.

I won't give the whole game away. To find out more about how to use this concept of risk, I'd highly recommend the books 'Leveraged Trading' and 'Systematic Trading' by Rob Carver.

Do you have any thoughts, ideas, or questions? Let me know in the comments or send me a message! I'd be glad to help you out.