ATR – The indicator that decides whether your stop is smart or suicidal
The ATR (Average True Range – Average True Range) doesn't tell you whether the price will go up or down.
It tells you how strong the movement is.
It's literally the volatility (intensity of movement) gauge.
🔍 How I use it:
High ATR → the market is nervous:
→ large candles, long wicks, rapid sweeps.
Low ATR → the market is calm:
→ narrow range, less noise.
🎯 The key point:
I use ATR to determine the size of my stop loss (maximum loss).
If ATR is high and you place a microscopic stop:
→ you'll be taken out of the market even if you're right about the direction.
If ATR is very low and you use giant stops:
→ you're giving away more money than necessary.
🤡 Common ATR mistakes:
❌ Always using the same stop size without considering volatility.
❌ Trading as if it's a normal day during major news or a dump.
❌ Ignoring that BTC with a 500 USD range is not the same as BTC with a 3,000 USD range.
🧠 Quick rule:
First, I check the ATR.
Then I decide whether this market is tradeable for my account and my mindset.
If you want me to make a post explaining how to calculate stops using ATR, comment ATR and share it. 💣