​​ Good to know How to set a Stop Loss using the ATR (Av | OctaFX Analytics

​​ Good to know

How to set a Stop Loss using the ATR (Average True Range) indicator.
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ATR makes traders’ life easier by showing the volatility for the selected timespan (default value is 14 candlesticks).
When trading significant levels, you may need to decide where to set Stop Loss (SL) even without any visible levels and structures.

And you usually want to set Stop Loss as low as possible.

To do so, you need the ATR value, which indicates the current market volatility. Therefore, you can set SL based on the ATR value and make your decision depending on the technical analysis and strategy.

The most common SL is 2×ATR. You can set such SL from the current level, when you enter the order upon the correction or reversal of the price. Such SL provides you with enough space to keep trading within your strategy. But if it triggers, this means the market went opposite your prediction.