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Regarding the calculation of ATR as stop loss

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    Regarding the calculation of ATR as stop loss

    Hello,
    I am taking the time to learn a bit about the ATR and its use as a stop loss. I am a bit confused. I have attached a picture of MES 09-20 1 minute with ATR 14. The ATR ranges from 1.4 to 0.63. Articles I read suggests using 2*ATR to set stop loss. That seems way too tight.0.7*2 = 1.4 + 3152 = 3153.5 - 3150.5. I would have expected to see the stop loss be more like 15-20 or 10x ATR

    Am I missing some math?

    #2
    Hello morrnel,

    Thanks for your post.

    ATR is the Average True Range (of the price bars) of the specified period. The ATR of 1-minute bars is likely going to be a much smaller range than a similar period ATR of 15 minute bars, 30-minute bars, hourly bars, daily bars, etc.

    Perhaps the article was based on a higher time frame than you are using.


    Paul H.NinjaTrader Customer Service

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