[isatrader]

hi Isa,
what is the acronym ATR(52weeks) in your journal mean?

Hi arkyuan, it is the 52 week Average True Range of a stock http://stockcharts.com/school/doku.php?i..._range_atr. I use it to gauge a stocks volatility over the last year, so that I can get an idea of the stocks normal weekly movement, so that I won't get shaken out of a trade by a normal movement that might seem large otherwise if I didn't understand it's normal range. As each stock has unique volatilty.

I also use it as a key part of my risk management strategy, as I calculate my position size using it to neutralise the volatility differences between all the stocks I trade. So for example my position size in a highly volatile small cap will be much smaller than my position size in large cap with low volatility.

The other key use I have for it is my maximum stop loss position, as I aim to never risk more than a maximum of 2% of my account on any trade, so as it is used for my position sizing, each 1x ATR move is the same as 1% in my account. So if a breakout is more 2x the 52 week ATR amount from an accepatable stop loss position then I'll pass on the trade, as I'm always looking to minimise risk on my entries. As I've found it's much easier to be profitable if I keep my loses as small as possible. So the ATR helps me with that.

It is not part of the method. It is something I've developed for myself over the last 10 years or so.

also how much volume is consider liquid for you?

I generally want to see at least one million shares traded on the volume on the daily chart breakout. So an average of about 500,000 a day I'd say I would consider as a minimum. Although I do occasionally consider less.