Risk management starts before the order
Finding a strong stock is only half a decision. Before buying, you still need to know where the idea becomes invalid, how much money would be lost there, and whether that loss fits the rest of the portfolio. The Risk Management page is designed to answer those questions for up to ten stocks at a time.
It displays the latest close, 14-day ATR, an initial stop based on two ATRs, annualised volatility, moving-average trend, turnover and beta. These values do not tell you whether a stock will rise tomorrow. They put different candidates on a common risk scale so that a volatile stock does not silently receive the same number of shares as a quiet one.
ATR measures movement, not direction
Average True Range estimates a stock's recent daily trading range. The calculation uses the largest of the day's high-low range, the gap from the prior close to the high, and the gap from the prior close to the low, then smooths that true range over 14 sessions.
ATR is expressed in price units. An ATR of 2 means the stock has recently moved about two price units per session; it does not mean a 2% move. Dividing ATR by the current price produces ATR%, which is more useful when comparing stocks at very different prices.
A two-ATR initial stop gives ordinary noise more room than a very tight percentage stop. If a stock is bought at 100 and ATR is 2, the reference stop is 96. That is a starting point, not a universal law. A clear structural low may be more meaningful, while an earnings announcement may create a gap larger than any historical ATR.
Position size comes from the loss budget
Once the stop is defined, calculate the position from the amount you are willing to lose:
shares = maximum loss per trade ÷ (entry price − stop price)
Suppose the account is worth 1,000,000 and the risk budget is 0.5%, or 5,000. At an entry of 100 with a stop at 96, risk is 4 per share, so the theoretical maximum is 1,250 shares. Round down for board-lot rules, fees and slippage.
If another candidate needs a 10-point stop, the same risk budget allows only 500 shares. This is the central idea: a higher-volatility stock receives a smaller position. Buying the same cash amount in every name does not create equal risk.
How to read the other fields
Annualised volatility converts roughly six months of daily-return variability into an annual figure. It is not a forecast of the next year's decline and it is not maximum drawdown. Use it to compare how demanding different positions may be psychologically and financially.
Moving-average trend uses the Taiwan convention of 5, 10, 20 and 60 sessions. Bullish alignment does not prevent a loss, but it shows that average costs across time frames are still rising in order. Convergence means the trend advantage is weakening; bearish alignment means the original long thesis needs much more scrutiny.
Turnover measures how quickly shares change hands. High turnover during a clean breakout can reflect broad participation. High turnover without price progress can instead signal disagreement or distribution. It must be read with price.
Beta estimates how a stock has moved relative to the broad market. Several high-beta semiconductor holdings may look diversified by company name while sharing the same market and sector risk. Historical beta can also change abruptly after company-specific news, so it is context rather than a promise.
Trailing stops only move in your favour
The page's trailing stop rises with the highest observed price after tracking begins and does not move lower when price falls. That one-way behaviour is deliberate. A stop that is repeatedly widened after a loss is no longer a risk rule; it is a delayed decision.
The yellow state means price is near the stop and gives you time to check liquidity and execution. The red state means the predefined level has been crossed. Neither state guarantees an exact fill, especially after an overnight gap.
A complete workflow
1. Check the homepage market environment before taking normal long exposure.
2. Use RS, sector strength and new highs to narrow the universe.
3. Use breakout structure or pullback screening to find a location with a definable invalidation point.
4. Enter the candidate and planned entry in Risk Management, then inspect the ATR stop distance.
5. Set the money risk first and derive shares from it.
6. After entry, use the trailing stop and price alerts without widening the original risk.
The result of screening is a candidate, not an order. If a sensible stop is too far away, reduce the shares, wait for a better location, or pass.
Portfolio risk is more than the sum of trade risks
Ten positions each risking 0.5% do not guarantee a maximum portfolio loss of 5%. In a systemic sell-off, correlated stocks can gap through their stops together. Sector concentration, total exposure and cash therefore form a second layer above trade-level sizing.
Run a simple weekly stress test: assume every holding reaches its stop and the most volatile holdings gap an additional ATR. If the combined loss is unacceptable, reduce exposure before trying to predict which name will break first.
Risk management cannot eliminate losses or guarantee execution. Its job is to make one mistake, one gap or one hostile market period survivable enough that you can keep following a sound process.
Use this software according to your own investing experience. Nothing here constitutes investment advice.