Enter the currency exchange rate and the average 1 month ATR for the year into the calculator to determine the ATR stop loss.

ATR (Average True Range) Stop Loss Formula

The following equation is used to calculate the ATR (Average True Range) Stop Loss.

ATR = CER * (1-ATRm1)

  • Where ATR is the average true range stop loss
  • CER is the current exchange rate
  • ATRm1 is the average 1 month ATR (decimal form)

To calculate the ATR stop loss, simply subtract the average 1 month ATR from 1, then multiply the result by the currency exchange rate.

What is ATR (Average True Range) Stop Loss?

Definition:

The ATR (Average True Range) Stop Loss is a technical indicator used in trading financial instruments, with traders using it to determine a stop loss level.

One of the primary uses for this indicator is to determine a stop loss level for a trade. In this case, once the price has fallen by an amount equal to or greater than 2 ATR values, a trader will sell their position to avoid further losses.

Average True Range (ATR) is a technical analysis indicator used to measure volatility. It is a measure of the magnitude of a move or a trend.

For example, assume that during the last 20 days, a stock has moved from $10 to $15 and then dropped back to $12 — it has made two moves: one from $10 to $15 and another from $15 to $12. The first move is considered the up-move, and the second is regarded as the down-move. If you take an average of these two moves (i.e., ($15-$12)/2), you get an ATR of 1.5.

The ATR indicator shows how far price moves on average in one day. A large ATR value means that price typically moves far in one direction before reversing course, while a small ATR value implies that price changes frequently, but not by much.