ATR position size calculator
Volatility-based sizing keeps your dollar risk constant whether the market is calm or violent. Enter your account, risk, entry, ATR and stop multiple to get a position size that automatically shrinks when volatility rises.
By Mustafa Bilgic · Published 2026-06-27 · Last updated 2026-06-27
ATR Position Size Calculator
Volatility-based sizing from Average True Range
How ATR position sizing works
The Average True Range (ATR), developed by J. Welles Wilder Jr. in his 1978 book New Concepts in Technical Trading Systems, measures how much an instrument typically moves over a period — the average size of a candle's true range. ATR position sizing uses that volatility to set your stop distance, then solves the standard risk formula for quantity:
stop distance = ATR × multiple
size = (account × risk%) / stop distance
Because the stop is a multiple of ATR, it automatically widens in volatile markets and tightens in calm ones. And because position size is inversely proportional to stop distance, your quantity falls when volatility rises and grows when it falls — so every trade risks the same number of dollars regardless of how choppy the market is. That consistency is exactly what you want across a portfolio of bots trading instruments with very different volatility.
A worked example
A $10,000 account risks 1% ($100) on an entry at $100. The instrument's ATR is $2.50 and you use a 2× ATR stop, so the stop distance is $5.00 and the stop sits at $95 (long). Position size = $100 / $5 = 20 units, a notional of $2,000. Now imagine volatility doubles to an ATR of $5.00: the stop distance becomes $10, and the same $100 risk buys only 10 units. Identical dollar risk, half the position — the market got twice as wild, so you take half the size. That is the whole point.
The formula targets a fixed dollar risk, but the resulting notional can exceed your cash if the stop is tight — meaning the position needs margin. Always size from risk first, then verify the notional and implied leverage fit your margin limits, never the other way around. See position sizing for trading bots for the full treatment and risk management for the exposure caps that sit on top.
Frequently asked questions
What is ATR position sizing?
ATR position sizing sets your stop distance as a multiple of the Average True Range, then derives quantity from the standard risk formula: size = (account times risk%) divided by (ATR times multiple). Because size is inversely proportional to ATR, every trade risks the same dollars whether the market is calm or volatile.
What ATR multiple should I use for the stop?
Common choices range from about 1.5 to 3 times ATR depending on how much room you want to give a trade before the stop fires. A larger multiple means a wider stop and a smaller position for the same dollar risk; a smaller multiple means a tighter stop and a larger position.
Why does a more volatile market give a smaller position?
Because the stop distance scales with ATR. When ATR rises, the stop is further away, so the same fixed dollar risk divided by a larger per-unit risk produces fewer units. This keeps your dollar risk constant across calm and wild conditions.
Is this ATR calculator free?
Yes. It runs entirely in your browser, requires no signup, and nothing you enter is sent to a server. You can read the exact formula above and verify the math yourself.