ATR Trailing Stoploss

The ATR Trailing Stoploss indicator provides a dynamic volatility-based exit and trend-following mechanism by calculating a trailing stop level derived from the Average True Range.

Usage

The ATR Trailing Stoploss is primarily used to identify trend reversals and manage risk through automated stop-loss levels. Traders use the plotted line to determine the current market bias:

• Bullish Trend: When the price is trading above the indicator line, the line turns green, suggesting an upward trend. Traders may use this as a signal to maintain long positions or look for buying opportunities.
• Bearish Trend: When the price falls below the indicator line, the line turns red, suggesting a downward trend. This can be used to manage short positions or as a signal to exit longs.
• Crossover Signals: A "BUY" label is triggered when the price crosses over the trailing stop line, while a "SELL" label is triggered when the price crosses under it.

The sensitivity of the indicator is highly dependent on the Multiplier and ATR Period. A higher multiplier will place the stop-loss further from the price, reducing "market noise" but potentially delaying exit signals.

Details

The indicator is constructed using a combination of the Average True Range (ATR) and a Highest High Value (HHV) lookback. The logic follows these steps:

1. Volatility Calculation: It calculates the ATR over a user-defined period to measure market volatility.
2. Trailing Offset: A trailing offset is calculated by subtracting the product of the ATR and the Multiplier from the current high price.
3. Price Floor: The script calculates the highest value of this offset over the HHV Period. This ensures that in a trending environment, the trailing stop moves upward with price action but does not immediately drop during minor retracements.
4. State Logic: The script compares the current price against the calculated stop level to determine if the trend has flipped, updating the plot color and signaling labels accordingly.

This implementation is a refactored and visually updated version of the original concept by @ceyhun.

Settings

• Atr Period: Sets the lookback period used for the Average True Range calculation. Default is 5.
• HHV Period: Sets the lookback period for the Highest High Value of the trailing offset. Default is 10.
• Multiplier: The value by which the ATR is multiplied to determine the distance between the price and the stop-loss line. Default is 2.5.
• Barcolor: A toggle to enable or disable the coloring of price bars based on the current trend detected by the indicator.

FAQ

How does the multiplier affect the signals? A lower multiplier makes the stop-loss tighter and more sensitive to price changes, resulting in more frequent signals. A higher multiplier makes the indicator more reactive to long-term trends by filtering out short-term price fluctuations.

Can this indicator be used for all assets? Yes, the ATR Trailing Stoploss is a volatility-adjusted tool, meaning it adapts to the specific price action of any asset, including stocks, forex, and crypto.

How to access the ATR Trailing Stoploss? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.