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2ATR / Close %

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### **2ATR Stop-Loss Ratio**

This indicator provides a straightforward calculation of **what percentage a 2ATR (Average True Range) move represents relative to the current price**. It's a specialized tool designed to help traders set dynamic, volatility-based stop-loss levels.

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### **Purpose of the Indicator**

Many traders use a **2ATR** as their standard for setting a stop-loss, believing it's a good measure of a stock's typical movement. However, it can be difficult to quickly determine the exact percentage a 2ATR drop represents from the current price. This indicator solves that problem by giving you a clear, single number that shows the **anticipated percentage loss before you even enter a position**.

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### **How It Works**

The indicator is calculated using a simple formula:

**(2 * ATR(20) / Current Price) * 100**

* `ATR(20)`: The Average True Range over the last 20 periods. This period can be customized in the indicator's settings.
* `Current Price`: The closing price at the time of calculation.

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### **How to Use It**

* **Assess Risk**: A higher number on the indicator means greater volatility, indicating a wider stop-loss range.
* **Set a Stop-Loss**: If the indicator shows **3%**, it means a 2ATR move is roughly a 3% change from the current price. This gives you a clear understanding of the potential loss.
* **Adjust Position Size**: If the potential percentage loss is larger than you're comfortable with, you can use this information to reduce your position size, effectively managing your risk.

This tool is especially useful for trading highly volatile stocks, as it helps you establish a clear and effective risk management strategy.

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