How to set a Suitable Stop-Loss using the Average True Range (ATR) Concept

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Assalam-o-Alaikum Steemians !

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I'm @moneyster, a professional level Cryptocurrency investor and an analyzer. As usual, today I thought to share another Crypto-related experience with you. I hope this article will be considerably beneficial for all the Steemians in this community

What is this Stop-Loss and its relation to the Average True Range (ATR) Indicator?

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I think we all have heard the word Stop-Loss those persons who are Trading Cryptocurrencies as well as other Major Trading methods such as Forex. If we are Cryptocurrency traders, we should need to focus more on these Stop-Loss as all the Cryptocurrencies are highly volatile as compared to other Currencies.

With the help of placing a Stop-Loss perfectly, we have the ability to manage our risk at a certain level. At the same time, we can prevent from sudden large market movements. The best example for demonstrating the value of this Stop-Loss, we can take look at the Traders who had invested in Luna Project. Those Traders who had not set a Stop-Loss, lost their entire investment within a few days

The majority of retail Traders don't focus on Stop-Loss even if they don't have enough capital. Sometimes, they don't have sufficient knowledge to place the Stop-Loss correctly. That's why they don't focus on Stop-Loss as the Price movement triggers the stop loss and continues its movements on the opposite side.

The best solution for placing the Stop-Loss correctly, we can easily use the Average True Range (ATR) Indicator to identify the exact location to set our Stop-Loss. This Average True Range (ATR) Indicator looks at the past candles perfectly and measures their volatility of them using the exact sizes of those candles. Then, we have the ability to place our stop loss with the help of this Average True Range (ATR) Indicator signal.

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What are the benefits of using the Average True Range (ATR) Indicator Concept and placing Stop-Loss?

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With the help of this Average True Range (ATR) Indicator Concept, we have the ability to place our Stop-Loss point in a suitable zone. Those Traders who don't have much knowledge to identify the exact volatility in the market, they can use this Average True Range (ATR) Indicator to identify the exact volatility at a certain level. This indicator really forces Traders to place the stop-loss after showing the real volatility and it minimizes the risk of the Trading. If don't have a large capital to invest, we have to divide the capital we already have and we can focus on this Average True Range (ATR) Indicator and easily place our Stop-Loss in a suitable entry.

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How to set a Suitable Stop-Loss using the Average True Range (ATR) Indicator?

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First of all, I will add these Average True Range (ATR) Stop Loss Finder to my Crypto Chart using the TradingView platform. Then we can go to "Indicators" through the tool panels and search "ATR Stop Loss Finder" in the giver search bar. Below I have included a screenshot to demonstrate adding the (ATR) Stop Loss Finder Indicator to our chart.

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Now I have demonstrated some good zones provided by this Average True Range (ATR) Stop Loss Finder to place our Stop Loss. Here we can see a Band from the above and below the price movement. Here we can easily place our Stop Loss from the below band for a Long order. At the same time, we can use the above band for a short order.

_{Screenshot Source - www.tradingview.com^Location}

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In this way, we can use this Average True Range (ATR) Indicator Concept for getting better and easy risk management opportunities. However, we can try to combine this strategy with some other indicators to minimize our risk.

At the same time, as I said in my previous article, we should remember that all the indicators and strategies are not efficient completely as nothing we can find 100% efficient in the world. So, we should depend only on these strategies and indicators to confirm our trading opportunities and manage our risk at a certain level.

I have studied the below-sourced articles to further study these topics and I have explained all the above facts in my own words and experience.

• Source 1

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Thank you all....!