ATR Volatility
Average True Range & ATR Stop Calculator
Understand market volatility. Learn how to calculate ATR and use it for dynamic stop loss placement.
01. The ATR Mathematical Formula
ATR calculates the average of true ranges over a period. True Range is the greatest of: (1) Current High to Low, (2) Previous Close to Current High, or (3) Previous Close to Current Low.
02. Calculating Dynamic Stops
Multiply the current ATR value by a factor (like 1.5x or 2.0x) to define a stop loss distance that adapts to market volatility.
03. Volatilty Regime Filters
Widen stops and reduce lot sizes during high ATR releases, preventing premature stop outs from temporary noise spikes.