Portfolio Review: Volatility Sets the Rules, We Just Listen
Position sizing isn’t about conviction — it’s about volatility. Here's how we’re managing Copper, Futures, and Thematic exposure in a shifting landscape.
Most traders treat volatility like a threat. I treat it like a guide.
Volatility isn’t the enemy — it’s a signal. It tells you how fast something moves, how far it might go, and how much emotional pain it can cause. Ignore it, and you size wrong. Panic at the wrong time. Cut winners too early and ride losers too far.
In this week’s Portfolio Review, I’m walking through how volatility shapes everything we do — from entry size to stop placement — across Copper, Futures, and Thematic positions. The Gold Volatility Index is speaking loudly. It’s telling us to stay flexible. Let’s dig in.
Volatility isn’t the enemy. It’s information. It tells you how fast something moves, how far it can go, and what kind of emotional pain it’s going to put you through.
If you ignore it, you’ll size positions wrong. You’ll set stops too tight. You’ll panic when something drops 8% that had a history of swinging 12%.
But when you understand volatility — really understand it — you build your portfolio with purpose.
You size smaller in volatile names like Bitcoin or Natural Gas
You give wide stops to junior silver miners and narrow ones to T-bills
You know when a 5% drawdown is noise — and when it’s a signal
Volatility tells you the truth about what you’re holding.
The job isn’t to avoid it. The job is to respect it.
Manage risk through structure, not emotion.
Volatility is the map.
Position sizing is the compass.
The Gold Volatility Index ($GVZ) is telling a story — and smart traders should be listening.
When volatility is high, you give your trades more room. Wider stops. Smaller size. Let the position breathe.
When volatility is low, the leash is tighter — smaller stops, bigger position size.
You can press when things are quiet.
But here’s how I handle it:
I size the trade at entry, based on the volatility at that moment — and I don’t change the size after that.
If I entered a position in December 2023, when $GVZ was calm, that’s the size I stick with — even if volatility spikes after.
I’m not sizing down.
The only thing that adjusts is the stop — and it gets wider.
Volatility tells me how aggressive or defensive to be.
It’s not about fear. It’s about structure.
This chart? It’s a reminder that risk isn’t random — it’s measurable.
Let the volatility set the terms. You just manage the trade.