ATR Calculator — Average True Range & Volatility Stops

Average True Range is a technical indicator developed by J. Welles Wilder in 1978 that measures market volatility. Unlike simple high-low range, ATR accounts for gaps between sessions by incorporating the previous close in its calculation. A high ATR means the market is volatile; a low ATR means it is quiet. ATR does not indicate price direction — it only measures volatility magnitude. Traders use it to set stop losses proportional to current market conditions rather than using fixed pip amounts.

Wilder's original recommendation was 14 periods, and this remains the most widely used setting. A 14-period ATR on the daily chart captures roughly three weeks of volatility. Shorter periods (7–10) make ATR more reactive to recent volatility spikes. Longer periods (20–50) smooth out noise and give a more stable baseline. For day trading, a 14-period ATR on your primary chart time frame is a solid default. Experiment with period lengths but avoid optimizing for a specific historical period as this leads to curve-fitting.

Multiply the ATR by your chosen multiple and place your stop that distance from your entry. For a long trade, subtract the stop distance from your entry price; for a short, add it. For example, if ATR is 0.0050 and you use a 2× multiple, your stop is 0.0100 away from entry. The logic is that normal volatility should not trigger your stop — the stop should only be hit if the market has genuinely moved against your thesis. Using a fixed-pip stop ignores current volatility and leads to stops that are too tight in volatile markets and too loose in quiet ones.

ATR as a percentage of price varies by pair and time frame. On the daily chart, major pairs typically trade between 0.3% and 1.5% ATR. EUR/USD and USD/JPY often range between 0.4–0.8% on the daily. Exotic pairs like USD/TRY or USD/ZAR can exceed 2–3%. On intraday charts, the ATR% is naturally smaller. Comparing ATR% across pairs on the same time frame lets you assess which markets offer more movement per unit of risk — useful for selecting which pairs to trade on a given day.

This calculator uses a simple arithmetic average of True Ranges, which is slightly different from Wilder's exponential smoothing method used by most charting platforms. Wilder's method weights recent True Ranges more heavily and produces a slightly smoother ATR line. The difference over 14 periods is typically small (less than 5%). For precise replication of your platform's ATR reading, enter the ATR value directly from your platform in Manual ATR Entry mode rather than computing it from scratch.

Yes. ATR-based position sizing is a core technique in systematic trading. The idea is to risk a fixed percentage of your account per ATR unit. For example: account = $10,000, risk per trade = 1% = $100, ATR = 0.0050, stop = 2× ATR = 0.0100. Position size = $100 ÷ 0.0100 = 10,000 units (0.1 lot for forex). This scales your position down in volatile markets and up in quiet markets, keeping your dollar risk constant regardless of volatility. Use our Position Size Calculator alongside the ATR Calculator for a complete risk management workflow.