# ATR-based Stop Distance ATR-based Stop Distance is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®. Plots long and short stop levels a configurable ATR multiple away from each bar's close or from a fixed entry price (2x a 14-period Wilder ATR by default) with gradient fills showing the room each stop grants and a dashboard translating the distance into price units, percent and ticks. Alerts fire when price trades to either level. - Indicator in the LuxAlgo Library, by LuxAlgo, published Apr 26, 2026. - Access: free. - Concepts: [ATR-based Stop Distance](https://www.luxalgo.com/library/concept/atr-based-stop-distance/) (primary) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=n3oy46w2rl9dsi7bjb7bl1vx - Page: https://www.luxalgo.com/library/indicator/atr-based-stop-distance/ **ATR-based Stop Distance** puts the volatility-sized stop on the chart before the trade. The build measures the Average True Range with a selectable smoothing and timeframe, multiplies it, and plots the resulting Long Stop and Short Stop levels around an anchor (each bar's close by default, or a fixed entry price for a live position), turning [ATR-based stop distance](https://www.luxalgo.com/library/concept/atr-based-stop-distance/) into a placement gauge. Gradient fills show the room each stop allows; the dashboard restates the distance in price, percent and ticks. ## How to Trade the ATR-based Stop Distance? - **Close anchor**: shows where an ATR stop would sit for an entry at that bar's price, a pre-trade sizing check that adapts with volatility. - **Entry Price anchor**: pins both levels to an actual fill; with Freeze ATR at Entry on and an Entry Time set, the distance is measured once on the entry bar so the placed level never widens; without an Entry Time the levels follow the live ATR. - **Stop-hit alerts**: fire when price trades to a level as it stood on the prior bar, the order a trader would actually have been holding. ## ATR-based Stop Distance Settings - **ATR Length** (default 14): the averaging window from Wilder's original work. - **Smoothing** (default RMA (Wilder)): RMA reproduces the classic ATR; SMA, EMA and WMA react differently. - **ATR Timeframe** (default: chart timeframe): point it one timeframe up when a swing entry wants more room. - **ATR Multiple** (default 2.0): the stop distance in ATR units. - **Anchor** (default Close), **Entry Price** (default 0, falling back to the latest close), **Entry Time** (optional) and **Freeze ATR at Entry** (default on): the fixed-entry workflow. - **Show Dashboard** (on) with **Position** (Top Right) and **Size** (Small); style: **Long Stop**, **Short Stop**, **Entry Line** and **Gradient Fill** (all on), **Line Width** (default 1). ## Frequently Asked Questions ### When would I use this instead of the Chandelier Exit? The [Chandelier Exit](https://www.luxalgo.com/library/indicator/chandelier-exit/) hangs its stop an ATR multiple off the best level since entry, ratcheting as the trade works, a management tool. This build is a placement gauge for the initial stop: anchored and frozen, it holds the level fixed. Place with one, trail with the other. ### Which ATR multiple fits my trading? The 2.0 default sits mid-range of common usage, running from roughly 1.5 on short-term trades to 3 for trend-following. Smaller multiples keep losses tighter but fall to routine fluctuation more often. Test the trade-off on your own market. ### Why freeze the ATR at the entry bar? It encodes the convention of never widening a stop after entry: the distance is computed once, on the bar the position started, and stays put. Disable it and the levels re-derive from the live ATR, expanding when volatility rises. ## Related indicators - [Predictive Ranges](https://www.luxalgo.com/library/indicator/predictive-ranges/) (ATR Bands): markdown at https://www.luxalgo.com/library/indicator/predictive-ranges.md - [Chandelier Exit Oscillator](https://www.luxalgo.com/library/indicator/chandelier-exit-oscillator/) (ATR): markdown at https://www.luxalgo.com/library/indicator/chandelier-exit-oscillator.md - [ATR Exceedance Probability Model](https://www.luxalgo.com/library/indicator/atr-exceedance-probability-model/) (ATR): markdown at https://www.luxalgo.com/library/indicator/atr-exceedance-probability-model.md - [ATR Expansion/contraction](https://www.luxalgo.com/library/indicator/atr-expansion-contraction/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/atr-expansion-contraction.md - [Average True Range](https://www.luxalgo.com/library/indicator/average-true-range/) (ATR): markdown at https://www.luxalgo.com/library/indicator/average-true-range.md - [Nadaraya-Watson Envelope](https://www.luxalgo.com/library/indicator/nadaraya-watson-envelope/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/nadaraya-watson-envelope.md - [Hot Zone Radar](https://www.luxalgo.com/library/indicator/hot-zone-radar/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/hot-zone-radar.md - [Volatility Contraction Pattern](https://www.luxalgo.com/library/indicator/volatility-contraction-pattern/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/volatility-contraction-pattern.md --- Source: https://www.luxalgo.com/library/indicator/atr-based-stop-distance/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/