How to use ATR to find Stop Loss?

Azlan00IM

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Hi, I've read in other forum that people use ATR to determine Stop Loss and Take Profit. Can anyone here elaborate in details on how to do this?
 
When I used to trust the technical indicators back in the day (I left them around 5 years ago), there used to be one technique around stop losses and the average true range. The norm was to place a stop 2.5 to 3 times the atr of any given chart.

So if a 5 min chart has an ATR value of 1.5, a good stop point would be 6 points away.

But ATR on its own is worthless. There is so much around it that needs to be settled before a directional trade is taken on.

Here is a video of Linda Raschke, who used to be a good market-maker on the floor back in the days, talking about ATRs. I do believe personally that most of these ATR or other technical analysis based triggers are useless now days.

If something is out there and already known to many, then the edge is lost.

Below are two videos for your education only. Don't get too impressed.

[video=youtube;9rHLGJq79ZU]https://www.youtube.com/watch?v=9rHLGJq79ZU[/video]

[video=youtube;5x--xYjuajE]https://www.youtube.com/watch?v=5x--xYjuajE[/video]
 
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