Published: September 24, 2025.
Last Update: July 20, 2026.
The Volatility Quotient (VQ) is the foundation of our system. It measures a security’s normal volatility—or risk—based on its historical price behavior. This allows us to provide customized trailing stops and determine the optimal number of shares to buy for any given position.
The VQ is not static. We recalculate it weekly, adjusting values up or down as needed to reflect current market conditions. This ensures that your risk signals evolve in line with the market, rather than remaining locked in the past.
VQ Risk Breakdown:
- Up to 15% → Low Risk
- 15% – 30% → Medium Risk
- 30% – 50% → High Risk
- 50% and above → Sky-High Risk
The VQ% trailing stop applies the security’s VQ to your position, beginning from the most recently detected high close price (marked by a purple “H” bubble) that occurs on or after your entry date. If the VQ increases, the trailing stop automatically lowers to give the stock additional room to fluctuate.
To prevent outsized losses in highly volatile assets, the VQ% trailing stop is capped at 55% when a security’s VQ exceeds that threshold. This cap keeps risk contained. However, if you’re comfortable with higher volatility and want to follow the stock’s full VQ, you can always set a custom trailing stop instead.
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