ATR Stop Loss Calculator
Set dynamic stop-loss based on Average True Range
What is this tool?
The ATR (Average True Range) stop-loss calculator sets dynamic stop-loss levels based on market volatility rather than arbitrary dollar amounts. J. Welles Wilder developed ATR in 1978 as a volatility indicator. By multiplying the ATR value by a factor (typically 1.5-3x), you create a stop-loss that adapts to current market conditions — wider in volatile markets and tighter in calm ones. This prevents premature stop-outs while protecting against genuine reversals.
How to use
- 1
Enter entry price
Type the price at which you entered your position.
- 2
Set ATR value
Input the current ATR value (typically 14-period).
- 3
Choose multiplier
Select your ATR multiplier (1.5x for tight, 2.0x for moderate, 3.0x for wide stops).
- 4
View stop levels
See your calculated stop-loss price and potential risk per share.
Frequently Asked Questions
What is ATR and why use it for stop-losses?
ATR measures average price movement over a period (typically 14 bars). Using ATR-based stops ensures your stop is set beyond normal market noise. A fixed $5 stop might work in calm markets but gets triggered by normal volatility during earnings or news events. ATR stops adapt automatically.
What ATR multiplier should I use?
The standard is 2.0x for swing trades and 1.5x for day trades. Conservative traders use 2.5-3.0x for position trading. The key is consistency — pick a multiplier and stick with it. Backtest your chosen multiplier against historical data for your specific market to find the optimal setting.
Should I use the same ATR for long and short positions?
The ATR value itself is direction-agnostic and can be used for both. For longs, subtract ATR×multiplier from your entry. For shorts, add it. Some traders use asymmetric multipliers — wider stops for shorts in bull markets where gap-ups are common.