Share Synthesis

The position size of each trade I take will be based on volatility and the indicator which I will use to measure is ATR.

ATR is the difference between the high and low price on any given day. It reveals information about how volatile a stock is. Large ranges indicate high volatility and small ranges indicate low volatility

One weakness of using this strategy to determine stop loss is that it might cause my system to be susceptible to noise resulting in unnecessary brokerage costs incurred. To overcome it, all 3 factors which I discussed earlier has to be implemented together..