# Using ATR for Stop Loss and Take Profit Levels

> Average True Range (ATR) helps you set stops and targets based on market volatility. Learn how to journal ATR trades.

**Tags:** atr, risk-management, stop-loss, take-profit
**URL:** https://traderjournal.app/technical-indicators/atr-for-stop-loss-and-take-profit

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# Using ATR for Stop Loss and Take Profit Levels

Setting a fixed stop loss in pips is a common mistake. A 20-pip stop loss might be too wide in a quiet market and too tight in a highly volatile market. The Average True Range (ATR) indicator solves this by measuring market volatility.

Using ATR-based stops ensures that your trade is given enough room to breathe based on current market conditions.

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## What to Log in an ATR Journal

To evaluate your ATR strategy, log the following variables:

- **ATR Value:** Record the daily or hourly ATR reading at the time of your trade.
- **Multiplier:** Note the multiplier used for your stop loss (e.g., 1.5x ATR or 2.0x ATR).
- **Market Volatility:** Note if the ATR was rising or falling, which indicates if the market was heating up or cooling down.

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## Adjusting to Volatility Changes

During periods of high volatility (high ATR), your stops will be wider, which means your position size must be smaller to maintain the same risk.

If you journal these adjustments, you can track whether you are maintaining a consistent dollar risk per trade. If your risk is fluctuating wildly, your position-sizing process needs improvement.

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## Optimizing Targets

By logging the ATR multiple at exit, you can see if you are leaving money on the table. For example, if you consistently exit at 1.0x ATR but price regularly moves to 2.0x ATR, you can adjust your targets to capture larger gains.

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Trader Journal for MT4 and MT5 automatically syncs your entry and exit prices, allowing you to calculate exact risk-to-reward metrics for your ATR strategies.

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