The ATR Calculator uses a stock’s Average True Range (ATR) to provide a profit target (P1) and stop loss based on the previous day’s price information.
Access to the ATR Calculator is reserved only to our Home Hedge Fund and WiseTraders Summit members.
The average true range (ATR) is a common measure of volatility used by many traders to determine optimum profit targets, initial stop loss and trailing stops. We apply the ATR in our semi-automated models (the OVI CoPilots under Home Hedge Fund) because it is objective and can be automated unlike guided discretionary trading (e.g., FlagTrader).
This application uses the previous day’s open, high, low or close to calculate the P1 and stop loss targets. It does not produce a P1 and stop loss based on your entry price. Therefore, we recommend using the ATR Trade Manager app instead to manage your trades.
The ATR value used in our applications (ATR Calculator and ATR Trade Manager) is based on the stock’s 5-day simple moving average of the True Range. The stock’s ATR value is not displayed in our application but you can obtain this by manually calculating on your own.
Additional information is available in the information button at the top left corner of this app. For more information on the ATR Trade Manager, see the ATR Trade Manager User Guide ➜
The ATR Trade Manager app uses 5.5 as the default ATR multiple for “long” trades
You can choose to use the default value of 5.5 for both “long” and “short” trades
A lower ATR multiple places greater emphasis on recent levels of volatility whereas a higher ATR multiple provides a broader measurement of the stock’s volatility
A higher ATR multiple (e.g., 14) is generally preferred by long-term investors
The calculator will calculate the P1 or stop loss based on the previous day’s open/high/low/close
The P1 is calculated as follows: Base Calculation + (ATR Multiple X Stock’s ATR)
If you selected “Close” as your base calculation in Step 5 of the ATR Calculator Inputs, the calculator will add the stock’s ATR calculation to the previous day’s closing price to produce a P1.
The stop is calculated as follows: Base Calculation – (ATR Multiple X Stock’s ATR)
If you selected “Close” as your base calculation in Step 5 of the ATR Calculator Inputs, the calculator will subtract the stock’s ATR calculation to the previous day’s closing price to produce a stop loss value.
This is the previous day’s closing price of the stock. It is automatically populated based on the stock ticker you input.