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Glossary / Market structure

ATR (Average True Range)

Definition

The average size of a bar's full range over a lookback period.

Why it matters

ATR is the standard way to set volatility-adjusted stops so a stop is wide enough for normal noise without inflating risk.

Example

A 14-period ATR of 12 points suggests a stop of at least 1.5x ATR (18 points) to sit outside normal noise.

How to track it in a journal

TradeStack calculates the core performance numbers — win rate, average win and loss, profit factor, expectancy, drawdown and consistency — automatically from imported trades, so atr (average true range) stops being something you estimate and becomes something you read.

Related terms

Slippage
The difference between your expected fill price and the price you actually get.
Spread
The gap between the best bid and the best ask.
Liquidity
How much size a market can absorb without moving price.
Volatility
How much price moves over a given period.

Keep reading

Trading journal guides
Expectancy, profit factor, drawdown, backtesting and the PDT rule.
Free trading calculators
Position size, risk-reward, expectancy and options profit.
Expectancy calculator
Expected profit per trade from your own numbers.
Broker CSV export guides
Step-by-step exports for Tradovate, NinjaTrader, IBKR and more.
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