ATR Stop Loss Calculator: Volatility-Based Stops and the Size They Allow
An ATR stop adapts to the market instead of to your hopes: wider when the range expands, tighter when it contracts. Feed in the ATR from your chart and this returns the stop level and the position size that keeps the money at risk the same.
An ATR stop sets the distance from recent volatility rather than a fixed number of pips: stop distance equals ATR multiplied by your chosen factor, commonly 1.5, subtracted from entry for a long. Position size is then risk money divided by (stop distance x value per price unit), so a wider stop automatically means a smaller position.
ATR stop and position size
Stop distance = ATR × multiple. Size = (account × risk%) ÷ (stop distance × value per price unit). For a standard forex lot that value is 100,000; for shares it is 1; for futures it is the contract's value per point. ATR measures recent range, not risk - it says nothing about the next candle.
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See what the desk does →How the ATR stop works
Average True Range is the average size of recent candles, including gaps. Multiply it by a factor - 1.5 is a common default - and you have a stop distance sized to current conditions rather than a fixed number of pips. Subtract it from entry for a long, add it for a short.
The table shows 1x, 1.5x, 2x and 3x side by side, because the choice is a trade-off: a tighter multiple is stopped out by ordinary noise, a wider one survives noise and forces a smaller position for the same money at risk.
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Play free, no signup →Where to get the ATR
Any charting platform: add the ATR indicator, period 14 by default, and read the current value in price terms on the timeframe you trade. Use the same timeframe you take the trade on - a daily ATR applied to a five-minute trade produces an absurd stop.
What ATR is not
- It is not a prediction. It measures what the range has been, not what it will be.
- It is not a level. A volatility stop can land in the middle of nowhere; combining it with structure is usually better than either alone.
- It lags a regime change. When volatility jumps, ATR catches up over the following candles, so stops set during the calm are too tight for the storm.
- It says nothing about direction, and a wider stop does not make a bad idea good.
Using it in a routine
Pick a multiple, write it into your plan, and apply it the same way every time so the results can be measured. Then size with this calculator or the lot size calculator - never the other way round.
Frequently asked questions
What ATR multiple should I use for stops?
1.5x is a common default; 1x is tight and suits clean trends, 2x or more suits choppy conditions. Pick one, apply it consistently, and measure the results rather than switching per trade.
What ATR period should I use?
14 is the standard setting. What matters more is using the same timeframe you actually trade.
Is an ATR stop better than a structure stop?
They answer different questions: structure says where the idea is wrong, ATR says how much noise to expect. Most traders use the structural level and sanity-check the distance against ATR.
Does a wider stop mean more risk?
No, if you resize. Risk is stop distance times position size, so a wider stop with a proportionally smaller position risks the same money.
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