ATR Stop Loss Calculator

ATR Stop Loss Calculator





ATR Based Stop Loss Calculator

The ATR Stop Loss Calculator helps traders manage risk by using the Average True Range (ATR) indicator, which measures market volatility. Created by J. Welles Wilder Jr., it’s a handy tool for setting stop loss levels effectively.

Why Use ATR to Set Stop Loss?

In trading, sometimes you predict the market’s direction correctly, but sudden price swings trigger your stop loss too soon. This can be frustrating, especially with the rise of computerized trading algorithms.

// Today 80% OF TRADES ARE PLACED BY HFT(HIGH FREQUENCY TRADING) COMPUTER ALGORITHMS //

The ATR Stop Loss Calculator addresses this issue by factoring in market volatility, providing stop loss levels that give your trades room to breathe.

How to Use the ATR Stop Loss Calculator

Using the calculator is simple:

  1. Identify Support and Resistance: Mark the levels where you think prices are likely to bounce back (support) or face resistance.
  2. Decide Your Risk: Determine how much risk you’re comfortable with. This will help you choose the right ATR multiples. For example, if you choose an ATR multiple of 1, your stop loss will be one times the ATR value.
  3. Calculate: Input your support and resistance levels, along with your chosen ATR multiple. Hit ‘Calculate’ to get your buy and sell stop loss levels.

ATR Setting For Stop Loss

ATR MULTIPLEPRO’SCON’S
1Low RiskMultiple False Stop Hit
2Good Stop loss levelMedium Risk
3Good for volatile assetsHigher Equity Drawdown
How To Select ATR Multiple?