Enter your entry price, ATR value, and an ATR multiple (and optionally a target multiple) into the calculator to estimate an ATR-based stop loss and target.
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ATR (Average True Range) Stop Loss Formula
The following equations are commonly used to set an ATR-based stop loss from an entry price (using an ATR multiple).
\begin{aligned}
D &= N \times ATR \\
Stop_{\text{long}} &= Entry - D \\
Stop_{\text{short}} &= Entry + D
\end{aligned}- Where ATR is Average True Range (a volatility measure, in price units)
- N is the ATR multiple (e.g., 1.5, 2, 3)
- Entry is the trade entry price
- D is the stop distance (in price units)
To calculate an ATR stop loss, multiply ATR by your chosen multiple to get the stop distance, then subtract that distance from the entry price for a long trade (or add it for a short trade). If you enter ATR in pips, convert pips to price units using the pip size; if you enter ATR as a percent, the stop distance is Entry × (ATR%/100) × N.
What is ATR (Average True Range) Stop Loss?
Definition:
An ATR stop loss (also called an ATR-based stop) is a stop-loss level set a chosen multiple of the Average True Range away from a reference price (commonly the entry price, or for trailing stops, a recent high/low).
Traders choose the multiple based on their strategy and the instrument’s volatility—for example, placing a stop 2×ATR away from entry. This “2×ATR” is a common rule of thumb, but it is not a requirement or a defining property of ATR.
Average True Range (ATR) is a technical analysis indicator that measures volatility using the true range. For each bar/day, true range is:
TR = max(High − Low, |High − Previous Close|, |Low − Previous Close|). ATR is then a moving average of TR over a lookback period (Wilder’s original ATR commonly uses 14 periods and Wilder’s smoothing).
Example (simple average for illustration): if the true range for three days is 1.2, 1.8, and 1.5, then a 3‑period ATR would be (1.2 + 1.8 + 1.5)/3 = 1.5. If your entry price is 50 and you use a 2×ATR stop, the stop distance is 2 × 1.5 = 3, so a long stop would be 50 − 3 = 47 (and a short stop would be 50 + 3 = 53).
ATR indicates typical range/volatility over the chosen period. A larger ATR generally means larger price ranges (more volatility), while a smaller ATR generally means tighter ranges (less volatility). ATR does not indicate trend direction by itself.
