What ATR multiplier should I use?

Most professional traders use 2× ATR for stop losses. Conservative traders use 3× ATR to avoid noise. Aggressive traders use 1.5× ATR but accept higher stop-out rates. Never use less than 1× ATR.

Does ATR work for scalping?

ATR is better suited for swing trading and position trading. Scalpers typically use fixed pip stops (5-10 pips) because ATR values on 1-minute or 5-minute charts are often too wide.

What ATR period is best?

ATR(14) is the default and works well for daily charts. For weekly charts, use ATR(10). For intraday, experiment with ATR(20) to smooth out volatility spikes. Avoid changing the period too often.

Can ATR predict volatility?

No, ATR measures past volatility, not future volatility. It adapts to recent market conditions but doesn't forecast. Use ATR for risk management, not prediction.

Should I adjust position size daily?

For swing traders holding multi-day positions, recalculate ATR and position size before each new trade. For existing positions, trailing stops based on ATR is more practical than resizing mid-trade.

What if ATR is very low?

Low ATR indicates consolidation or low liquidity. Consider trading smaller or avoiding the pair entirely, as breakouts from low ATR periods often lead to sudden volatility spikes.

ATR Position Size Calculator

Calculate position size based on ATR (Average True Range) for volatility-adjusted risk management.

ATR-Based Position Size

Calculate dynamic position size based on Average True Range (ATR) volatility.

Account Balance ($)

ATR Value

ATR Multiplier

Currency Pair

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What is the ATR Position Size Calculator?

What Is an ATR Position Size Calculator?

The ATR Position Size Calculator uses the Average True Range (ATR) indicator to determine optimal position size based on current market volatility. Unlike fixed stop-loss methods, ATR-based sizing adjusts to market conditions—trading smaller during high volatility and larger during calm periods.

ATR measures the average price movement of an asset over a specified period (typically 14 periods). By setting stop losses as a multiple of ATR (e.g., 2× ATR), traders ensure their stops are wide enough to avoid noise while maintaining consistent risk across all trades.

Why ATR-Based Sizing Matters

Volatility Adaptation: Automatically adjusts position size to market conditions
Reduced Noise: Prevents premature stop-outs during normal market fluctuations
Consistent Risk: Maintains uniform risk percentage regardless of pair volatility
Professional Standard: Used by institutional traders and systematic strategies

Formula Explanation

Position Size = (Account Balance × Risk %) ÷ (ATR × Multiplier × Pip Value)

Where:

ATR: Current Average True Range value from your chart
Multiplier: Typically 1.5× to 3× ATR for stop loss distance
Risk %: Percentage of account risked on each trade (usually 1-2%)

Example: If GBP/JPY has an ATR of 150 pips (high volatility) and you use a 2× multiplier, your stop loss would be 300 pips. The calculator reduces your lot size accordingly so risking 300 pips still equals your 1% risk limit.

How to Use This Calculator

How This Calculator Works

Step-by-Step Guide

Add ATR to Chart: Open your trading platform and add the ATR indicator (default settings: 14 periods)
Read ATR Value: Note the current ATR reading (displayed in pips or price units)
Choose Multiplier: Select 1.5×, 2×, or 3× ATR for your stop loss (2× is standard)
Input Account Details: Enter account balance and risk percentage (typically 1%)
Enter Currency Pair: Select the pair to calculate correct pip value
Calculate: View the recommended lot size adjusted for current volatility
Set Stop Loss: Place stop at Entry ± (ATR × Multiplier)

Real-World Example

Real-World Examples

Example 1: Low Volatility EUR/USD

Account Balance: $10,000
Risk: 1% ($100)
ATR(14): 50 pips (calm market)
Multiplier: 2×
Stop Loss Distance: 50 × 2 = 100 pips

Calculation:

Position Size = $100 ÷ (100 pips × $10 per pip) = 0.10 lots

In calm conditions, you trade larger size because your stop loss is tighter.

Example 2: High Volatility GBP/JPY

Account Balance: $10,000
Risk: 1% ($100)
ATR(14): 180 pips (volatile market)
Multiplier: 2×
Stop Loss Distance: 180 × 2 = 360 pips

Calculation:

Position Size = $100 ÷ (360 pips × $10 per pip) = 0.028 lots

During high volatility, you trade much smaller to avoid being stopped out by normal market swings while maintaining consistent 1% risk.

Example 3: Comparing Fixed vs. ATR Sizing

Fixed Stop Loss (50 pips):

EUR/USD (ATR 50): 50-pip stop, 0.20 lots
GBP/JPY (ATR 180): 50-pip stop, 0.20 lots ❌ (Too tight, likely stopped by noise)

ATR-Adjusted Stop Loss (2× ATR):

EUR/USD (ATR 50): 100-pip stop, 0.10 lots ✅
GBP/JPY (ATR 180): 360-pip stop, 0.028 lots ✅ (Wide enough for volatility)

ATR sizing normalizes risk across different volatility profiles.

When to Use

When to Use This Calculator

Trading Multiple Pairs: Essential when managing positions across pairs with vastly different volatilities (e.g., EUR/CHF vs. GBP/NZD)
Volatile Market Conditions: During news events, geopolitical uncertainty, or market regime changes when ATR spikes
Swing Trading: Longer-term traders benefit from ATR-based stops that accommodate multi-day volatility
Systematic Trading: Algorithmic and rule-based strategies often use ATR for dynamic risk management
Avoiding Overtrading: ATR forces you to trade smaller during high volatility, reducing frequency and stress

Common Mistakes

Common Mistakes to Avoid

Using Fixed Stops Across All Pairs: A 20-pip stop on EUR/USD (low volatility) may be adequate, but the same 20-pip stop on GBP/JPY (high volatility) will get stopped out by noise. ATR solves this.
Wrong ATR Period: The default ATR(14) works for daily charts. For intraday trading, consider ATR(20) or ATR(50) to smooth out noise.
Ignoring ATR Spikes: During major news events, ATR can double or triple. Failing to recalculate position size after an ATR spike leads to excessive risk.
Too Small Multiplier: Using 1× ATR for stop loss is too tight—price often touches 1× ATR within normal market movement. Professionals use 2-3× ATR.
Not Updating ATR Regularly: ATR changes daily. Using yesterday's ATR for today's trade introduces calculation errors. Always use current values.
Forgetting Currency Conversion: When trading cross pairs (e.g., EUR/GBP with a USD account), ensure ATR is converted to your account currency for accurate position sizing.

Use Together With

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Frequently Asked Questions

Risk Warning: Trading forex and CFDs involves significant risk and can result in the loss of your invested capital. The information and tools provided on this page are for educational purposes only and should not be considered financial advice. Always ensure you understand the risks involved before trading.

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What Is an ATR Position Size Calculator?

Why ATR-Based Sizing Matters

Volatility Adaptation: Automatically adjusts position size to market conditions

Reduced Noise: Prevents premature stop-outs during normal market fluctuations

Consistent Risk: Maintains uniform risk percentage regardless of pair volatility

Professional Standard: Used by institutional traders and systematic strategies

Formula Explanation

Position Size = (Account Balance × Risk %) ÷ (ATR × Multiplier × Pip Value)

Where:

ATR: Current Average True Range value from your chart

Multiplier: Typically 1.5× to 3× ATR for stop loss distance

Risk %: Percentage of account risked on each trade (usually 1-2%)

How This Calculator Works

Step-by-Step Guide

Add ATR to Chart: Open your trading platform and add the ATR indicator (default settings: 14 periods)

Read ATR Value: Note the current ATR reading (displayed in pips or price units)

Choose Multiplier: Select 1.5×, 2×, or 3× ATR for your stop loss (2× is standard)

Input Account Details: Enter account balance and risk percentage (typically 1%)

Enter Currency Pair: Select the pair to calculate correct pip value

Calculate: View the recommended lot size adjusted for current volatility

Set Stop Loss: Place stop at Entry ± (ATR × Multiplier)