i created this example to help me with this formula i found in the book called "The crypto trader" by Glen Goodman and idk if i got it right i spent like an hour or so trying to figure it out sicne it was so confusing so if u guys can tell me if i understood the formula right that would be really nice heres the formula :
total budget : $100 000
price of the crypto ATM : $0.91
ATR on 30 days : $0.129
price i bought at : $0.91
price of my stop loss : 0.714
so to my determine position size i should determine the difference between the price i bought at versus the stop loss (support line)
0.91 - 0.714 = 0.196
price bought at - stop loss = the money risked per coin
since i only want to risk 1% or less of my total capital i multiply by 5000 the money risked per coin to make it to $980 (wich is 0.98% of 100 000)
0.196 x 5000 = 980
now that i know that i want 5000 coin lets multiply the ATR by 5000 so it matches the the equation we did before
0.129 x 5000 = 645
now with those position i can say that i have 1.51 ATR (wich means if the crypto goes 1 and a half days downward at a rate of 0.129 per coin (or by $645 since i bought 5000 coin) the stop order will be trigered
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