Gregoire Channel Width

5 thg 12, 2020

This indicator goes with the Gregoire Channel (not shown). It measures the distance from an edge to the middle of the channel.

This serves two purposes:

1) Volatility adjusted position sizing
2) Options buying/selling

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The formula for volatility adjusted position size is: (account value * risk) / (GC Width / Entry price).

For example, let's say we have a $15,000 account size and want to risk 2% on a TQQQ trade. The GC Width is $8.77 and entry is $167.59.

That gives us a position size of: (15,000 * 0.02) / (8.77 / 167.59) = $5,732.84. Our stop would be around the middle of the channel, in this case.

We use this so we avoid getting blown out in fast-moving markets, yet still make enough for slow moving markets. Too much risk destroys accounts!

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The green and red colors indicate areas to buy and sell options. RED = sell options, GREEN = buy options.

Options are priced according to volatility. We want to buy them when volatility is low, and sell them when volatility is high. These can also be used as take-profit areas: we buy options on the green and close for profit on the red areas, etc.

8 thg 12, 2020

Phát hành các Ghi chú

Use the link below to get access to this indicator, plus the Gregoire Channel and Gregoire Channel Strategy!

11 thg 12, 2020

Phát hành các Ghi chú

Cleaned up the expansion/contraction color signals.

18 thg 12, 2020

Phát hành các Ghi chú

Provided support for brand new markets with no history.

Changed color scheme: GREEN means expansion, RED means contraction.