New Tool For Risk Management

Some of you may like this, you'll need Worden's StockFinder to use it, but I know many of you are already using it.

If you want to look into some great charting platforms, check Worden's out at these links and don't forget to tell them that Brandt from Trade-Guild sent you

And you can go here for TeleChart information
For FREE Realtime Charts, this is the best platform I've seen and it's true real time, no delays like most free charting software. There's no gimmicks, the real time feed is paid for with small adds on the sides of the charts which you don't even notice.
Here's my new risk management tool

If you have read my risk management link   then you probably know that I advocate not losing more then 1-2% of total portfolio value (before margin) on any one trade. There's also a more conservative approach in the article linked above. Typically we do this by figuring out 2% of or portfolio, and divide that by our entry price less our stop (risk), which will give us the number of shares we can buy and not lose more then 1 or 2% if we are stopped out (position sizing).
The difficulty or wildcard is opening gaps which can be unpredictable, there's no way to protect against an opening gap that slices right through our stop out level. So I asked the guys at Worden to create this indicator which I then created several more indicators based on it. 
In the first window at the top, we have the chart of our stock, ETF, average, etc. In white we have the biggest gap (either up or down) over the last year. You can see with APPL, up until 1/14/2011 the biggest gap we had seen in AAPL had been 19.45 points (dollars), after that and currently, the biggest gap we've seen in AAPL has been $21.43.
In Yellow, I've turned this indicator into a "Market Indicator". The yellow line represents the median gap in the S&P100 over a 500 day period; the median gap for the S&P 100 is $3.89.  The Red line represents the highest 1% average gap in the S&P-100 over a 500 day period, which comes in at $21.43. Remember this is the biggest average gap in the top 1% largest gaps for the S&P 100 over a 500 day period. The Green line represents the smallest 1% average gap in the S&P 100 over a 500 day period.
I find the first indicator the most useful. I now know what the largest gap has been and I can position size according to that gap. For example, I have a $100,000 portfolio and I am willing to risk 2% per trade ($2000) so I now know that the biggest gap I'm likely to face is $21.43 ($2000/$21.43= 93 shares// 93 shares * $335=$31,155. 
If I'm trading the Index through an ETF, I might want to use the median gap. The Index can be changed too, so you can get the median gap for the NASDAQ 100 if you trade the QQQ's of for the S&P 500 if you trade the SPY, etc.
You can also observe how volatility has risen historically which may help you decide whether you want to risk 1 or 2% of portfolio value on a position. In AAPL's case, when it was trading at $134 in July of 2007, the largest gap was only $6.86. Now we are trading 250% higher, the expected gap at similar volatility would be $17.15, but it is actually $21.43 so you can watch trends in volatility as well.
I'm sure there are many things you can use this for if you think about it, I think it's useful information and if you have StockFinder, let me know if you'd like to try the layout.