Average True Range is the average of the true range (the day's high–low span, adjusted for gaps) over a lookback window, typically 14 periods. It measures how much the instrument typically moves.

What ATR multiplier should I use?

Common choices are 1.5×–3×. Tighter multipliers exit faster but get hit by normal noise more often; 2× is a widely used default for swing trading.

Where do I find the ATR value?

Every major charting platform has an ATR indicator — read the current value off the chart for your timeframe and enter it here in price units.

Does a wider ATR stop mean more risk?

Not if you size the position to it: a wider stop with fewer shares risks the same cash as a tighter stop with more shares. This calculator does that sizing automatically.

Should ATR come from the same timeframe I trade?

Yes — a day trader should use intraday ATR and a swing trader daily ATR. Mixing timeframes makes the stop distance meaningless for your holding period.

How is this different from the position size calculator?

Same sizing maths, different starting point: there you choose the stop price yourself; here the stop distance is derived from volatility (ATR × multiplier) first.

Risk & Money Management

ATR Stop Loss Calculator

Set a stop loss from the Average True Range: stop distance = ATR × multiplier, placed below or above entry, with position sizing to your risk percentage.

An ATR stop loss is a stop placed a multiple of the Average True Range away from entry, so the stop distance adapts to the instrument's current volatility.

Stop-loss price

Stop distance: 5
% of entry: 5%
Position size: 20 units
Risk amount: $100.00
Position value: $2,000.00

Stop distance = ATR × multiplier, placed below entry for longs and above for shorts.

Worked example

A trader buys a stock at $100. The 14-day ATR is $2.50 and they use a 2× ATR stop, risking 1% of a $10,000 account.

Stop distance: $2.50 × 2 = $5.00 (5% of entry)
Stop price: $100 − $5 = $95
Risk amount: $10,000 × 1% = $100
Position size: $100 ÷ $5 = 20 shares ($2,000)

The stop goes at $95 — far enough that normal daily noise (one ATR) shouldn't hit it — and 20 shares keeps the loss at exactly $100 if it does.

How this is calculated

The stop is placed a fixed multiple of the Average True Range away from entry, so its distance scales with the instrument's actual volatility:

stopDistance = ATR × multiplier
stop = entry − stopDistance (long) · entry + stopDistance (short)

The position is then sized so a stop-out costs exactly your chosen risk fraction:

units = (balance × risk%) ÷ stopDistance

A volatile instrument gets a wide stop and a small position; a quiet one gets a tight stop and a larger position — cash risk stays constant either way.

When to use this calculator

Use this when placing stops on instruments with different volatility, or when a market's volatility has changed. A fixed 2% stop is tight for one stock and absurdly wide for another; an ATR-based stop adapts the distance to how much the instrument actually moves.

It pairs the stop with position sizing: the wider volatility forces the stop, the fewer shares you take, so the cash risk stays fixed. That link — distance from volatility, size from risk — is the whole discipline in one calculation.

It is also useful for auditing existing stops: if your stop sits inside one ATR of entry, normal daily noise can take it out regardless of whether the trade idea was right.

Common mistakes

Using a fixed-dollar or fixed-percent stop across instruments with very different volatility — the whole point of ATR stops is that the distance adapts.
Choosing the multiplier after seeing the position size you want, which quietly inflates risk instead of respecting volatility.
Forgetting to recompute as ATR changes — a stop set in a quiet regime can be far too tight once volatility expands.

Frequently asked questions

What is ATR?: Average True Range is the average of the true range (the day's high–low span, adjusted for gaps) over a lookback window, typically 14 periods. It measures how much the instrument typically moves.
What ATR multiplier should I use?: Common choices are 1.5×–3×. Tighter multipliers exit faster but get hit by normal noise more often; 2× is a widely used default for swing trading.
Where do I find the ATR value?: Every major charting platform has an ATR indicator — read the current value off the chart for your timeframe and enter it here in price units.
Does a wider ATR stop mean more risk?: Not if you size the position to it: a wider stop with fewer shares risks the same cash as a tighter stop with more shares. This calculator does that sizing automatically.
Should ATR come from the same timeframe I trade?: Yes — a day trader should use intraday ATR and a swing trader daily ATR. Mixing timeframes makes the stop distance meaningless for your holding period.
How is this different from the position size calculator?: Same sizing maths, different starting point: there you choose the stop price yourself; here the stop distance is derived from volatility (ATR × multiplier) first.