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ATR Stop (short) — Volatility, on the price chart.
What ATR Stop (short) measures
The value is close plus multiplier × Wilder ATR over N bars, with the same defaults as the long side: 14 and 2. The ATR behind it is built from true ranges that include the distance from the previous close to the current bar's extremes, so a move between bars widens the offset instead of being absorbed silently. Like its counterpart, the level is anchored on the close rather than on a running extreme, so it drifts both ways, and it is left undrawn until the ATR has enough bars to be defined.
The formula, as implemented
This is not how the indicator is usually defined elsewhere — it is what the shipped code computes, documented next to the implementation:
ATR Stop (short) — symétrique exact du précédent, au-dessus du close : stop[i] = close[i] + mult × ATR_N[i] Mêmes défauts (14, 2), même warm-up, même avertissement : c'est un tracé, pas un ordre. Livré séparément du long (et non en deux lignes d'une seule def) parce qu'on ne trade JAMAIS les deux sens en même temps : afficher le stop du sens qu'on ne porte pas est du bruit visuel permanent.
How to read it
- The distance between price and the line is the room the current volatility grants before the reference is reached; it widens on its own as bars get larger.
- A close above the line is the event the study exists for, but read what produced it — a violent single bar also raises the ATR, which pushes the line further away on the next bar.
- The same symbol on two different bar types produces different levels, because true range is measured per bar and a tick bar and a one-minute bar do not contain the same amount of trade.
- After a wide bar the offset stays large for a while: with Wilder smoothing that true range leaves the average only gradually, over roughly N bars.
- Display the short line only while carrying or considering a short; the opposite side is a permanent line that never applies.
Parameters and defaults
ATR period (default 14, range 1 to 200) governs how fast the offset responds to a change of regime, and the multiplier (default 2, range 0.1 to 10) sets how many ATRs above the close the line sits. A multiplier below 1 places the level inside the span of a normal bar, where ordinary noise reaches it repeatedly.
| Parameter | Type | Default | Range |
|---|---|---|---|
| ATR period | number | 14 | 1 – 200 |
| ATR multiplier | number | 2 | 0.1 – 10 |
What it does not show
Nothing here is an order: the study never routes, and execution requires the separate, explicitly armed trading path. The line has no knowledge of your entry price or size, so its distance is not a risk amount in currency. It can drift down with price and back up again, which means it locks nothing in. On an illiquid symbol or outside main session hours, true ranges shrink and the level hugs price more tightly than the real gap risk justifies.
Related indicators
- True Range — Volatility
- Std Dev — Volatility
- Squeeze — Volatility
- Chaikin Volatility — Volatility
- Realized Vol — Volatility
- Skewness — Volatility
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Frequently asked questions
- How does the short ATR stop differ from the long one?
- Only in sign: the short version adds the ATR multiple to the close, the long version subtracts it. Period, multiplier, warm-up behaviour and the underlying Wilder average are identical. They are shipped as two indicators because you would not normally hold both sides at once.
- Does the ATR stop take overnight gaps into account?
- Yes, through the true range. Each bar's true range is the largest of its own high-low span, the distance from the previous close to the high, and the distance from the previous close to the low, so a gap enlarges the measured range. The gap therefore widens the ATR and pushes the level further from price.
- Why did my short ATR stop line jump away from price?
- A single large bar enters the Wilder average with a weight of one over the period, and that lifts the ATR immediately. The offset above the close grows with it, so the line steps away on the next bar. It then narrows again slowly as that true range is averaged out.