Stocks ATR V2

📘 Description — Stocks AT SL V2

“Stocks AT SL V2” is a risk management indicator designed to help traders define dynamic stop-loss levels based on actual market volatility and advanced statistical analysis of price movements.

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🎯 Purpose

This tool provides a rational and adaptive framework for stop-loss placement, taking into account:

• Market volatility, measured by the Average True Range (ATR),
  
• And a statistical safety buffer, based on the 95th percentile of historical price retracements.
  

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⚙️ Methodology

ATR Calculation:

• The indicator uses a 14-period ATR to measure recent average volatility.
  

Safety Factor (k) Estimation:

• The script computes a set of ratios between the candle’s minimal retracement (relative to the previous close) and the current ATR.
  
• The 95th percentile of these ratios is extracted to define a multiplicative factor k, representing common price extremes.
  

Final Stop-Loss:

• The stop-loss is set at a distance of k × ATR below (or above) the entry price.
  
• This helps reduce false stop-outs while allowing room for natural market movement—even in volatile conditions.
  

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✅ Benefits

• Automatically adapts to volatility.
  
• Reflects real candlestick structure (not just arbitrary distances).
  
• Standardizes risk across different stocks or currency pairs.