Blog
Practical notes on volatility, expected ranges, and risk management, written for self-directed traders and investors.
What is stock volatility and why does it matter?
Stock volatility measures how much a stock's price fluctuates over a given period, and it determines whether a 3% daily move is routine noise or a genuine warning sign. It directly affects how you size positions, where you place stops, and whether you stay in a trade or exit at exactly the wrong moment.
How much can a stock move in one day?
The S&P 500 moves between -1% and +1% on roughly 70% of trading days, but the only number that matters is what your specific stock can do right now. Getting that wrong is how you set a stop-loss that triggers at the low of the day, only to watch the stock fully recover by mid-morning.
How to manage risk when trading stocks
The majority of retail traders lose money not from picking the wrong stocks, but from poor position sizing and stops that ignore how the stock actually moves. Effective risk management means defining your maximum loss in pounds before you enter a trade, then sizing the position so that hitting your stop equals exactly that loss.
How to know if a stock dip is worth buying
A stock dip is worth buying when the move is within the stock's normal volatility range, the fundamentals are unchanged, and the cause is broad market sentiment rather than company-specific news. The hard part is knowing what normal looks like for that specific stock before you decide to act.
How to calculate the expected move of a stock
The expected move of a stock is calculated as Stock Price × Implied Volatility × √(Days / 365), giving you the one standard deviation range for a chosen period. It is not just a tool for options traders; it is one of the most practical inputs into stop placement and position sizing for any market participant.