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ATR Indicator for Deriv Traders: How to Read It and Set Stop Losses With It

Updated 2026-10-18 · H-BOT Africa team

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Quick answer: ATR (Average True Range) tells you how far price normally moves in one candle. It does not show direction. Traders use it to place stop losses beyond normal noise (often 1.5–2× ATR), to size positions, and to pick barriers. The default setting is 14 periods.
ATR 14 and a 2×ATR trailing stop on real Volatility 75 candles
Real V75 5-minute candles: the 2×ATR stop trails the price and widens when the market gets busier.

How ATR Is Calculated

  1. True range of a candle = the largest of: high − low, |high − previous close|, |low − previous close|.
  2. ATR = the average true range of the last 14 candles (smoothed).
  3. The result is in price points: an ATR of 130 on V75 means a typical 5-minute candle covers about 130 points.

Using ATR for Stop Losses

Stop distanceEffect
1× ATRTight: often hit by normal noise
1.5× ATRCommon compromise
2× ATRRoom for noise; smaller position needed
3× ATRVery wide; for longer trends

A trailing ATR stop moves up as price rises (2× ATR under the close) and never moves down, so it locks in gains in a trend.

Using ATR for Position Size

Risk per trade ÷ stop distance = position size. Example: $500 account, 1% risk = $5; stop = 2× ATR. If each point is worth $0.02 at your lot size and 2× ATR is 260 points, the loss at the stop is $5.20, so the size is about right. See the lot size guide.

Using ATR on Deriv Options

ATR rising? Bigger candles mean more risk per trade. Cut the stake when ATR jumps, rather than keeping the same size.

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Risk warning: Trading Deriv products such as digit options, multipliers and synthetic indices is high-risk. You can lose all the money you deposit, quickly. No bot, signal or strategy can guarantee profit, and past results do not predict future results. Practise on a demo account first, only trade money you can afford to lose, and check that Deriv is allowed where you live. This guide is education, not financial advice.
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Frequently Asked Questions

What is the ATR indicator?

A measure of how far price usually moves per candle, without showing direction.

What is the best ATR setting?

14 periods is standard; shorter reacts faster but is noisier.

How do I set a stop loss with ATR?

Place it 1.5–2× ATR beyond your entry or the last swing, then size the trade so that distance equals 1–2% of your balance.

Does a high ATR mean price will go up?

No. ATR measures movement size, not direction.

Can I use ATR on synthetic indices?

Yes; it shows the normal move size for each index and timeframe.

What is an ATR trailing stop?

A stop that follows price at a set ATR distance and only moves in your favour.

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