ATR+ (Stop Loss Indicator)

The ATR+ (Stop Loss Indicator) tool calculates and displays real-time Average True Range (ATR) values alongside dynamic stop loss distances to assist traders in back-testing and precise trade execution.

Usage

The ATR+ indicator is primarily used to determine position sizing and stop loss placement based on market volatility or fixed point values. Traders can use the displayed values to set their exit parameters relative to recent price action.

• Long Trades: The indicator calculates the distance between the current close and the most recent swing low, adding an extra buffer based on the user's ATR or pip settings. This value is typically displayed in green.
• Short Trades: The indicator calculates the distance between the current close and the most recent swing high, incorporating the specified stop loss buffer. This value is typically displayed in red.
• Volatility Adjustment: By enabling the ATR multiplier, the stop loss distance automatically expands during high volatility and contracts during low volatility, providing a dynamic risk management approach.

Details

The script operates by identifying extreme price points within a user-defined lookback period. For long positions, it identifies the lowest low; for short positions, it identifies the highest high. These points serve as the foundation for the stop loss calculation. To ensure the output is actionable for various markets, the values are converted into whole numbers or pips.

The calculation logic incorporates a Risk/Reward (R/R) profile, which projects target sizes based on the initial risk. By calculating the distance from the entry price to the swing point plus the ATR buffer, the script provides a comprehensive view of the required "pip" distance for both the stop loss and the take profit levels.

Settings

• R/R: Sets the Risk:Reward profile to calculate target sizes relative to the stop loss distance.
• ATR Length: Defines the period used for the Average True Range calculation.
• Lookback: Determines how many bars the script looks back to find the most recent swing high or low.
• Stop Distance (in pips or ATR): The numerical value used for the stop loss buffer. This is interpreted as pips if the multiplier toggle is off, or as an ATR multiplier if it is on.
• Use ATR Multiplier for stop loss: A toggle to switch between a fixed pip-based stop distance and a volatility-adjusted ATR multiplier.

FAQ

How does the Lookback setting affect the stop loss? The Lookback setting determines the window of time used to find the recent swing high or low. A higher lookback period will result in more conservative stop losses placed further away from current price action, as it considers a wider range of historical price extremes.

Can I use this indicator for fixed-risk management? Yes. By disabling the "Use ATR Multiplier" setting, you can input a specific pip value for your stop distance, allowing for consistent stop loss padding regardless of market volatility.

How do I access the ATR+ (Stop Loss Indicator)? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.