ATR Stop Loss: Set Stops From Volatility | Borearis
ATR is the average true range: how much an instrument typically moves in a given period. An ATR stop places the stop a multiple of that range away from entry.
The formula
Stop distance = ATR × multiplier. A long stop is entry − distance; a short stop is entry + distance.
Why use it
A fixed 20-pip stop is too tight in a volatile week and too wide in a quiet one. ATR scales the stop with current volatility, so the trade gets room to breathe without changing your risk in money.
Position size follows
A wider stop means a smaller lot for the same risk. Use the ATR stop calculator for the price, then the position size calculator for the size.
What is a good ATR multiplier?
One to two times ATR is common. Higher multipliers survive more noise but require smaller positions.
Does ATR stop guarantee a better result?
No. It standardises the stop distance; entry quality still decides the outcome.
Which ATR period should I use?
Fourteen periods is the default on most platforms; match it to the timeframe you trade.
Educational content only, not investment advice.