1. Core Logic Long Positions: Places a stop-loss below the previous bar's low by a buffer of ATR * bufferMultiplier. Short Positions: Places a stop-loss above the previous bar's high by the same ATR-based buffer. 2. Key Features ATR Volatility Adjustment: Uses the Average True Range (ta.atr()) to adapt stop distances to market volatility. Larger ATR values widen the stop buffer during volatile markets.
User-Defined Buffer: The bufferMultiplier lets you fine-tune how tightly/loosely stops follow price (e.g., 0.5 uses half the ATR value).
3. Visualization Dynamic Lines: Plots two lines on the chart:
Green for long stop levels. Red for short stop levels. Lines update on every bar to reflect new price action. Historical Levels: Optional trailing lines show only the most recent stop levels (avoysluttering the chart).
4. Use Cases Trailing Stop-Loss: Track price momentum while maintaining a volatility-based safety margin. Entry Confirmation: Identify potential reversal zones where price breaks through the ATR-buffered stops. Risk Management: Size stops proportionally to market volatility, avoiding fixed-price thresholds. Example Scenario: If the previous candle’s low is $100, ATR is $2, and bufferMultiplier = 0.5: Long Stop = 100 - (2 * 0.5) = $99. Price must drop below $99 to trigger the stop, giving trades breathing room.