How to determine the typical fluctuation of a stock?

[Seeeker99]

Hi, How can I determine the typical daily fluctuation of a stock in order to determine the appropriate stop/loss percentage just beyond that, at which to trigger a sell? Is this an appropriate strategy to factor in daily price fluctuations and not prematurely trigger a sell?

Goal here is to protect gains without triggering a sell that is within normal fluctuation. Or if there are any other strategies I could follow I'm all ears.

Thank you

 

[Trader333]

Try looking at Average True Range (ATR) as this is often used to determine where a stop should be based on the measured volatilty of the instrument being traded. It is not perfect but for stocks is better than using an arbitrary number of cents or percentage value of the stock or other methods such as moving average crossovers etc.

 

[Seeeker99]

Try looking at Average True Range (ATR) as this is often used to determine where a stop should be based on the measured volatilty of the instrument being traded. It is not perfect but for stocks is better than using an arbitrary number of cents or percentage value of the stock or other methods such as moving average crossovers etc.

Ok thank you. Is ATR a metric that is presented with other basic metrics, easy to find at a glance? Or is that something I have to manually calculate?

 

[Trader333]

It is included in most packages that have charting packages.

 

[Atilla]

Hi, How can I determine the typical daily fluctuation of a stock in order to determine the appropriate stop/loss percentage just beyond that, at which to trigger a sell? Is this an appropriate strategy to factor in daily price fluctuations and not prematurely trigger a sell?

Goal here is to protect gains without triggering a sell that is within normal fluctuation. Or if there are any other strategies I could follow I'm all ears.

Thank you

You might want to consider looking at Pivot Points as levels too. Prices usually bounce off those as they effectively become Support and Resistance.

Just an idea...

 

[timsk]

Ok thank you. Is ATR a metric that is presented with other basic metrics, easy to find at a glance? Or is that something I have to manually calculate?

Have a gander at the excellent article that Trader333 wrote about ATR:

Position Sizing as an Approach to Risk Management​

 

[THT]

Hi, How can I determine the typical daily fluctuation of a stock in order to determine the appropriate stop/loss percentage just beyond that, at which to trigger a sell? Is this an appropriate strategy to factor in daily price fluctuations and not prematurely trigger a sell?

Goal here is to protect gains without triggering a sell that is within normal fluctuation. Or if there are any other strategies I could follow I'm all ears.

Thank you

There's no perfect trailing stop method - Fiddle about with what you feel makes sense and comfortable with

Below shows a trailing stop based on a 40 period Average True Range [ATR]

This one is based on 2 x the 40 ATR figure

The range will change depending upon what cycle the stock/market is in - If you used the 2 x 40ATR on that downtrend, you'd of been stopped out a lot

Good Luck