Volatility Position Sizer
Position sizing should never be static. If you allocate $10,000 to a utility stock and $10,000 to a volatile tech stock, your portfolio risk is entirely dominated by the tech stock.
Systematic trend followers size positions inversely to volatility (often measured by Average True Range or ATR). This ensures that every position contributes equal risk to the portfolio.
For sizing based on statistical edge rather than just volatility parity, use the Kelly Criterion.