ATR, or تریدینگ پروفسور Average True Range, measures market volatility through the average of true range calculations over a set number of periods.

Rather than relying on rigid dollar amounts or fixed percentages, ATR enables traders to set stop losses that dynamically respond to shifting market conditions.

Once displayed, the current ATR value becomes your baseline for determining stop placement.

A widely adopted method is to place your stop loss at two times the ATR value below your entry for long positions, or above your entry for short positions.

For instance, if the ATR reads 1.50 and you enter a long trade at 100.00, your stop would be set at 97.00—calculated as 100.00 minus (2 × 1.50).

They help you remain in winning trends longer and exit faster when the tide turns.

A 14-period ATR on a daily chart reflects broader market sentiment, while the same setting on a 5-minute chart captures rapid intraday noise.

Always combine ATR stops with support

When used correctly, ATR-based stops become one of the most reliable tools for preserving capital and maximizing profit potential across all market conditions.