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Position sizing..


I have chance upon a blog  discussing using of ATR to derive the position and it sounds feasible hence I have decided to give it a try as money management is an integral part of a system..

ATR basically shows the amount of volatility that a stock has over a period of time.. A common convention is to use a 14 days ATR..  In his blog , his strategy works something like this..

- Determine the amount of money in account
- Determine the amount to risk(Can i integrate fundamental analysis to derive risk(
- Find out the ATR
- Multiply ATR by 2(static)
- Position can be derived by taking amount to risk (5000) divide by the above sum

Scenario

A stock cost $4.
I have 20 000 in account and able to risk 4% for the particular trade.. ATR is currently 0.246 for the stock..

Risk : $800
Stop : 0.246 * 2 = 0.492
Position : 800 / 0.492= 2 Lot (round off)
Sop loss at 3.508.

Question : Possible to use the ATR accordingly  based on some factors like fundamentals , time horizon.