Originally Posted by
adam ali
Billy,
When you say the trailing stop will rise exponentially faster over time, why is that? I assume it has to do with contracting volatility but not sure how the math works to cause the stop to move this way.
Also, I'm trying to figure out how to use ATR in such a fashion that it can "target" drawdown percentages. In other words, if I'm not comfortable with the historical intra-trade drawdown of an instrument, is there a way to manipulate ATR to maximize return while keeping drawdowns to the stated percentage.
I confess I'm relatively new to the ATR concept.