Anyone here position or swing trade using Van Tharp's percentage volatility position sizing model.... What do you think are the benefits of using such a type of position sizing strategy over the percentage risk model? --MIKE
THe best feature I can think of regarding the % volatility model is.. If you are using very tight stops.. like a %1 stop...then the volatility % model wont necessarily allocate all you funds to one position... because the % risk model would allocate all funds to one position if the actual stop loss is %1. Although we want to maximize position size as much as possible... in reality allocating entire portfolio to one position is suicide for swing traders.. --MIKE