ATR Calculator
Calculate Average True Range to measure volatility and set optimal SL/TP levels.
Price Data
ATR Analysis
- ATR of 45 pips suggests moderate volatility
- Consider widening stops during high volatility
- Adjust position size based on ATR
Understanding Average True Range
What is ATR?
ATR measures market volatility by calculating the average range between high and low prices over a period. It's not directional - it only shows how much price typically moves.
Using ATR for SL/TP
Set stop losses 1-2× ATR from entry to account for normal volatility. Take profits at 2-3× ATR for reasonable reward. This adapts to current market conditions.
ATR and Position Sizing
Higher ATR means more volatile markets - reduce position size. Lower ATR means calmer markets - you can size larger. This keeps dollar risk consistent.
📐 ATR Calculation Formula
True Range = Max(High-Low, |High-PrevClose|, |Low-PrevClose|) ATR = SMA(True Range, Period) or EMA(True Range, Period) 1. Calculate True Range for each of the last 14 candles
2. Sum all True Range values
3. Divide by 14
4. Result: ATR = 0.0045 (45 pips for most pairs)
⚙️ ATR Multiplier Guide
Conservative (1× ATR)
Tight stops, more stop-outs. Good for high win-rate strategies. Requires precise entries.
Standard (1.5× ATR)
Balanced approach. Allows for normal market noise while protecting capital.
Wide (2× ATR)
Room for price swings. Better for swing trading. Requires smaller position size.
Very Wide (3× ATR)
Maximum breathing room. For position traders. Significantly reduced position size needed.
Frequently Asked Questions
What is ATR in forex trading?
ATR (Average True Range) is a volatility indicator that measures the average range of price movement over a specified period. It helps traders set appropriate stop losses and position sizes based on current market volatility. Our ATR calculator computes this indicator instantly.
How do I calculate ATR?
ATR is calculated by averaging the True Range over a period (typically 14). True Range = Max of: (High - Low), (High - Previous Close), (Previous Close - Low). Our ATR calculator automates this calculation for any currency pair and period.
What ATR period should I use?
14 periods is the standard and works well for most trading styles. Shorter periods (7) react faster to volatility changes. Longer periods (20-50) give smoother, more stable readings. Match the ATR period to your trading timeframe and style.
How do I use ATR for stop loss placement?
Multiply ATR by a factor (typically 1.5x to 3x) and place your stop loss that distance from entry. For example, if ATR is 50 pips and you use 2x ATR, set your stop 100 pips away. This ensures stops respect current volatility levels.
How do I interpret high vs low ATR?
Compare current ATR to its recent history. If today's ATR is much higher than average, volatility is elevated - use wider stops or smaller positions. If ATR is lower than usual, the market is quiet and tighter stops may work. Our ATR calculator helps you assess volatility.
Does ATR predict market direction?
No. ATR only measures volatility magnitude, not direction. High ATR means big moves are happening - but not whether price will go up or down. Use other indicators like trend analysis and momentum for directional bias.
How does timeframe affect ATR value?
Higher timeframes have larger ATR values. Daily ATR will be much bigger than 1-hour ATR. Always use ATR from the same timeframe you're trading. Don't mix - use daily ATR for daily trades, H1 ATR for H1 trades, etc.
Should I always use ATR for stop losses?
ATR is one tool among many for stop placement. Consider price structure (support/resistance), recent swing highs/lows, and your risk tolerance alongside ATR. ATR gives a volatility-based starting point - adjust based on the full technical picture.
How do I use ATR for position sizing?
Use ATR to adjust position size based on volatility. When ATR is high (volatile market), use smaller positions. When ATR is low (quiet market), you can potentially use larger positions while maintaining the same dollar risk.
Can I use the ATR calculator for any market?
Yes! ATR works for forex, stocks, crypto, commodities, and any tradable instrument. Simply enter the high, low, and close prices for your chosen period. Our ATR calculator provides accurate volatility readings for any market.