What stop-loss price should I use if I base my stop on the stock's ATR?

How this is calculated

• Stop distance in dollars equals the ATR value multiplied by the multiplier you enter (ATR × multiplier).
• For a long trade, the stop-loss price equals entry price minus the stop distance. For a short trade, the stop-loss price equals entry price plus the stop distance.
• ATR (Average True Range) measures how much a stock typically moves over a given period, commonly 14 periods, and is available on most charting platforms. This calculator does not calculate ATR itself, you provide it as a dollar value.
• Basing a stop on a multiple of ATR is a common way to give a trade enough room to move with its normal volatility instead of getting stopped out by ordinary price swings, while still keeping the risk per share fixed and known in advance.
• There is no single correct multiplier. A wider multiplier reduces how often you get stopped out by noise but increases the dollar risk and reduces how many shares your risk budget allows. A narrower multiplier does the opposite.
• Once you have a stop-loss price, use the Risk/Reward Ratio Calculator to check the trade against your target, or the Position Size Calculator to see how many shares your risk budget allows at this stop distance.