ATR Stop-Loss Calculator
Place a volatility-based stop a chosen multiple of Average True Range from your entry, so your risk matches how much the stock actually moves.
How it works
Stop distance = ATR × multiple · Stop (long) = entry − stop distance · Stop (short) = entry + stop distance
An ATR stop sets your exit a fixed multiple of Average True Range away from entry, so a jumpy stock gets a wider stop and a calm one a tighter stop. This keeps you from being shaken out by ordinary noise while still capping the loss on a real reversal. Common multiples run from about 1.5 to 3 ATR; wider multiples survive more volatility but cost more per share when the stop is hit.
Worked example
You go long at $100 on a stock with an ATR of $2.50 and use a 2× multiple. The stop distance is $5, so the stop sits at $95 — a 5% move. On 100 shares that risks $500, an amount tied to how much the stock genuinely swings rather than a round percentage.
Frequently asked questions
What is ATR?
Average True Range is the average size of a stock’s daily range over a lookback period (commonly 14 days), including gaps. It is a pure measure of volatility in price terms, which is why it works well for sizing stops.
What ATR multiple should I use?
Most traders use between 1.5 and 3 times ATR. Tighter multiples reduce per-trade loss but get stopped out more often; wider multiples ride through noise at the cost of a larger loss when wrong. Match it to your timeframe and system.
Why use ATR instead of a fixed percentage?
A flat 5% stop is too tight on a volatile stock and too loose on a stable one. ATR adapts the stop to each stock’s real behavior, so every position is given room proportional to how much it actually moves.
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Educational estimate, not investment advice. Trading involves risk of loss.