Fixed size is not fixed risk
The same position is twice as risky when daily ranges double. Holding size constant while volatility rises quietly increases your exposure.
Volatility suppression scales position size inversely to a measured volatility level, so your risk per trade stays roughly constant.
Choosing a measure
Average true range or realised volatility over a recent window are the common choices. Use a window long enough not to whipsaw, short enough to react — usually 14 to 30 periods.
Ready to put this into practice?
Start with paper trading →Side effects to expect
Smaller size in volatile regimes means smaller wins there too. The payoff is a smoother equity curve and a much lower chance of a single regime shift ending the strategy.