How is the ATR stop-loss calculated?

21 Oct 2026 · 4 min read

In short

The stop shown is the latest price minus a multiple of the ATR, the average size of the moves over 14 sessions. It is a volatility marker, not an order nor a promise to cap the loss.

The stop-loss shown next to a stock answers a simple question: how far can the price fall without leaving its usual range of moves? It is calculated from the stock's volatility, not from a fixed percentage.

What the site measures

Stop = latest price − 2.5 × ATR(14)

The ATR, for Average True Range, is the average size of a session over the last 14: the gap between the high and the low, taking a jump at the open into account. A calm stock has a small ATR, so a nearby stop; a nervous stock has a large ATR, so a stop further away. The analysis page shows it with the ATR as a percentage of the price, and its rank among the other stocks:

A demonstration stock's markers, including the ATR stop-loss. — Screenshot on the demonstration data: stocks, prices and scores are fictional.

In the backtest, the same calculation serves as an exit rule: the stop is set 2.5 times the ATR below the entry price, then rises with the highest price reached: it follows the price up, never down.

What the measurement does not say

That the loss will be capped there. The site places no orders. And even at a broker, a price can open well below a stop after bad news: the order then fills at the next price, not at the stop.
Where to put your stop. The ATR multiple is a convention. Your stop depends on what you are willing to lose, not only on the stock's volatility.
A fixed value. The ATR changes every day, so the stop shown does too.
Much on an asset that barely moves. On a money-market fund the ATR is almost zero and the stop would be hit by noise: it is one of the reasons why those funds have no score.

The video tutorial

Analysing a stock in detail 41s Open analysis: candlestick chart, indicators, stop-loss and related instruments.

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Educational content: these articles explain what the site's measurements calculate, so that you can decide for yourself, knowing what they mean. Investing carries a risk of capital loss. See the legal notice.