Trading Tools

ATR Indicator in Pine Script

5 min read

ATR Indicator in Pine Script

The Average True Range (ATR) measures market volatility. This guide covers all ATR implementations for position sizing, stops, and volatility analysis.

Basic ATR

Simple ATR

//@version=6
indicator("ATR Basic", overlay=false)
 
length = input.int(14, "Length")
 
atr = ta.atr(length)
 
plot(atr, title="ATR", color=color.blue, linewidth=2)

ATR on Chart

//@version=6
indicator("ATR on Chart", overlay=true)
 
atr = ta.atr(14)
 
// Plot ATR as line
plot(atr, title="ATR", color=color.orange)
 
// Also show as background
bgcolor(atr > ta.atr(14)[1] ? color.new(color.red, 90) : color.new(color.green, 90))

ATR for Stop Loss

ATR-Based Stops

//@version=6
indicator("ATR Stops", overlay=true)
 
atr = ta.atr(14)
multiplier = input.float(2.0, "Stop Multiplier")
 
sma20 = ta.sma(close, 20)
 
// ATR stop levels
stopLong = close - atr * multiplier
stopShort = close + atr * multiplier
 
plot(stopLong, color=color.red, title="Long Stop")
plot(stopShort, color=color.green, title="Short Stop")
plot(sma20, color=color.blue)

Trailing Stop ATR

//@version=6
indicator("ATR Trailing Stop", overlay=true)
 
atr = ta.atr(14)
multiplier = input.float(3.0, "Multiplier")
 
// Long trailing stop
trailLong = close - atr * multiplier
 
// Plot
plot(trailLong, color=color.red, title="Trail Stop")
 
// Show when stopped out
stopOut = close < trailLong[1] and close[1] >= trailLong[1]
plotshape(stopOut, location=location.abovebar, style=shape.labeldown, color=color.red, text="STOP")

ATR Position Sizing

Risk-Based Sizing

//@version=6
indicator("Position Size Calculator")
 
accountSize = input.float(10000, "Account Size")
riskPercent = input.float(2.0, "Risk %")
atrLength = input.int(14, "ATR Length")
 
atr = ta.atr(atrLength)
 
// Risk amount in dollars
riskAmount = accountSize * (riskPercent / 100)
 
// Position size (shares/contracts)
positionSize = riskAmount / atr
 
// Display as label
plotchar(positionSize, char="", title="Position Size")
 
// Show calculations
label.new(bar_index, close, "Risk: $" + str.tostring(riskAmount, "#.##") + "\nSize: " + str.tostring(positionSize, "#.##"), 
     color=color.blue, textcolor=color.white, size=size.small)

ATR for Volatility Analysis

Volatility Indicator

//@version=6
indicator("ATR Volatility", overlay=false)
 
atr = ta.atr(14)
atrMA = ta.sma(atr, 20)
 
// High volatility
highVol = atr > atrMA * 1.5
 
// Low volatility
lowVol = atr < atrMA * 0.5
 
plot(atr, color=color.blue, title="ATR")
plot(atrMA, color=color.orange, title="ATR MA")
 
// Background for volatility
bgcolor(highVol ? color.new(color.red, 90) : lowVol ? color.new(color.green, 90) : na)

ATR Percent

//@version=6
indicator("ATR Percent", overlay=false)
 
atr = ta.atr(14)
 
// ATR as percent of close
atrPercent = (atr / close) * 100
 
plot(atrPercent, title="ATR %", color=color.purple)
 
hline(2, color=color.red, linestyle=hline.style_dashed)
hline(1, color=color.orange, linestyle=hline.style_dashed)
hline(0.5, color=color.green, linestyle=hline.style_dashed)

ATR Bands

ATR Bands

//@version=6
indicator("ATR Bands", overlay=true)
 
atr = ta.atr(14)
atrMA = ta.sma(atr, 20)
 
// Bands around ATR MA
upperBand = atrMA * 1.5
lowerBand = atrMA * 0.5
 
plot(atr, color=color.blue, title="ATR")
plot(upperBand, color=color.red, title="Upper")
plot(lowerBand, color=color.green, title="Lower")
 
fill(plot(upperBand), plot(lowerBand), color=color.new(color.gray, 90))

Price ATR Bands

//@version=6
indicator("Price ATR Bands", overlay=true)
 
atr = ta.atr(14)
multiplier = input.float(2.0, "Multiplier")
 
sma20 = ta.sma(close, 20)
 
// Price-based ATR bands
upper = sma20 + atr * multiplier
lower = sma20 - atr * multiplier
 
plot(upper, color=color.red)
plot(sma20, color=color.blue)
plot(lower, color=color.green)

ATR with Other Indicators

ATR + RSI

//@version=6
indicator("ATR + RSI", overlay=false)
 
atr = ta.atr(14)
rsi = ta.rsi(close, 14)
 
// High volatility + oversold = potential reversal
signal = atr > ta.atr(14)[1] and rsi < 30
 
plot(atr, color=color.blue, title="ATR")
plot(rsi, color=color.red, title="RSI", scale=scale.left)
 
plotshape(signal, location=location.bottom, style=shape.arrowup, color=color.lime)
 
hline(70)
hline(30)

ATR + Moving Averages

//@version=6
indicator("ATR + MA", overlay=true)
 
atr = ta.atr(14)
sma20 = ta.sma(close, 20)
sma50 = ta.sma(close, 50)
 
// Volatility filter
volFilter = atr < ta.atr(20)[1] * 1.2
 
// Trend
uptrend = sma20 > sma50
 
// Signal
buySignal = uptrend and volFilter and ta.crossover(close, sma20)
 
plot(sma20, color=color.green)
plot(sma50, color=color.red)
 
plotshape(buySignal, location=location.belowbar, style=shape.labelup, color=color.lime, text="BUY")

Complete ATR Indicator

//@version=6
indicator("Complete ATR System", overlay=false)
 
// === INPUTS ===
atrLength = input.int(14, "ATR Length")
showVolatility = input.bool(true, "Show Volatility")
showLevels = input.bool(true, "Show Levels")
 
// === CALCULATIONS ===
atr = ta.atr(atrLength)
atrMA = ta.sma(atr, 20)
atrPercent = (atr / close) * 100
 
// === PLOTTING ===
plot(atr, title="ATR", color=color.blue, linewidth=2)
plot(atrMA, title="ATR MA", color=color.orange)
 
if showLevels
    hline(atrMA * 1.5, color=color.red, linestyle=hline.style_dashed)
    hline(atrMA * 0.5, color=color.green, linestyle=hline.style_dashed)
 
if showVolatility
    highVol = atr > atrMA * 1.5
    lowVol = atr < atrMA * 0.5
    
    bgcolor(highVol ? color.new(color.red, 90) : lowVol ? color.new(color.green, 90) : na)

ATR Strategies

ATR Volatility Strategy

//@version=6
strategy("ATR Volatility Strategy")
 
atr = ta.atr(14)
atrMA = ta.sma(atr, 20)
 
// Low volatility breakout
lowVol = atr < atrMA * 0.7
breakoutUp = close > ta.highest(high, 20)
 
if lowVol and breakoutUp
    strategy.entry("Long", strategy.long)
 
// Exit on high volatility
if atr > atrMA * 1.5
    strategy.close_all()
 
plot(atr)
plot(atrMA)

ATR Trend Strategy

//@version=6
strategy("ATR Trend")
 
atr = ta.atr(14)
sma20 = ta.sma(close, 20)
 
// Trend
uptrend = close > sma20
 
// Entry with ATR stop
if uptrend
    stopPrice = close - atr * 2
    strategy.entry("Long", strategy.long)
    strategy.exit("Stop", stop=stopPrice)
 
// Exit
if ta.crossunder(close, sma20)
    strategy.close_all()
 
plot(sma20)

ATR Breakout Strategy

//@version=6
strategy("ATR Breakout")
 
atr = ta.atr(14)
ema20 = ta.ema(close, 20)
 
// Consolidation
range = ta.highest(high, 20) - ta.lowest(low, 20)
avgRange = ta.sma(range, 20)
 
// Narrow range + ATR expansion
consolidating = range < avgRange * 0.5
expanding = atr > atr[1] * 1.5
 
if consolidating and expanding
    strategy.entry("Long", strategy.long)
 
// Stop
stopLoss = close - atr * 2
strategy.exit("SL", stop=stopLoss)
 
plot(ema20)

ATR Reference

ConceptDescription
High ATRHigh volatility
Low ATRLow volatility
ATR × 2Common stop distance
ATR × 3Conservative stop
ATR / CloseVolatility %

Next Steps

ATR is essential for risk management and volatility analysis.

Graph View

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