And how do we position ourselves so we don’t get out too early or hold them too long? With the TradeStops risk management system! We help you understand the risk you’re taking in each of your positions and when the best time is to get out of those positions.
The heart of the TradeStops system is called the 波动商数, or VQ for short. The VQ is measured as a percentage of a stock’s week-ending closing price. For instance, the VQ of Apple Inc. (AAPL) on 12/20/2019 was 18.42%.
The algorithm used to determine the VQ of any stock is proprietary to TradeStops. The purpose of the VQ is to know what the normal volatility is of any stock, fund, or index over an 18-month time frame. We use three years’ worth of data, with the past year being more heavily weighted than the previous two years’ worth of data.
When we say that AAPL has a VQ of 18.42%, we’re saying that the normal volatility of AAPL is $53.40, which is the most recent close ($289.91) multiplied by 18.42%. This is not a prediction of future price movement. This is strictly a measurement of the normal volatility for AAPL.
股票不会直线上涨，也不会直线下跌。这是今年早些时候 AAPL 的四个星期视图。 7 月底的高点是 211.60 美元，几天后又跌至 192.03 美元。这在短短几个交易日内下跌了将近 20 个点。
If you had bought AAPL at the top, and didn’t know its VQ at the time, you could have easily been scared and sold it.
But what if you had seen the TradeStops view of AAPL that shows its normal volatility in this chart? The purple line below shows a 追踪止损 equal to the VQ of AAPL.
您会看到 AAPL 完全处于其正常波动水平内，不会被吓跑。你会从你的知识中获得回报，因为 AAPL 股票在过去五个月里上涨了近 100 点！止损现在位于 236.50 美元。
出于参考目的，特斯拉 (TSLA) 的波动性比 AAPL 大，但您知道波动幅度有多大吗？
The VQ for TSLA is almost exactly double that of AAPL. It has a VQ of 36.38%. That means if you buy TSLA, you have to be comfortable with it potentially moving against you by 36% and understanding it’s still in an uptrend.
If your risk tolerance is such that you can’t or don’t want to withstand a 36% loss or even more, then TSLA is probably not a stock you should consider for your investment 投资组合.
Most all of the tools found on TradeStops has its origin in the 波动商数. During our next “Back to Basics” article, we’ll show you how the dota2排位段位_刀塔2赛事靠谱竞猜大小盘app软件-刀塔2海外结果网页 (SSI) signals were developed using the VQ as its basis. We’ll also show you how the SSI can be used as simple green/yellow/red signals for your entire stock management.
In the meantime, please join us for our first webinar of 2020 on Wednesday, Jan. 8 at 1 p.m. ET. We’ll be going in more depth of the 波动商数 and talking about how the VQ differs from other measures of volatility. 单击此处 to register.
Research and Education Specialist, TradeSmith