my thoughts are that the amount wagered should be worked back from the amount that is prepared to be lost on each trade....stocks vary in their BETA, so if the amount risked on each stock is to be similar, the amount invested should vary according to their BETA
ie.it might be equally safe to wager twice the amount on a stock with a lower beta than another stock with a higher beta.
for example two stocks which I have been trading are IAG & MQA.... their betas are 0.52 & 1.34 respectively..... therefore 2,5 times more could be wagered on IAG compared with MQA with the amount risked being approximately the same..
COMMSEC give stock betas in there company research section.
the average percentage gain each day or the trading band width over the stocks price to give a percentage would also give an approximate idea of its volatility.
I haven't even thought of considering a stock's beta when placing a trade, but I think I will start getting into the habit after slightly a bigger loss on MGA today - ie my increments wagered on this stock in future will be a much lesser percentage than has been to date
i should add that i have made some good money on this stock also because of its high beta.
