ATR Position Size Calculator
Size your position dynamically using ATR stop distances to normalize market volatility.
How the Calculation Works
Read parameters and compute total exposure: multiply order quantity by contract unit multiplier.
Evaluate terminal return at the selected target price using strict financial mathematical boundary logic.
Deduct upfront capital commitments, taxes, or net debits to produce final net profit or loss realization.
Calculation Formula
Example Calculation
₹2L capital, 1.5% risk, ATR ₹12.50 with 2.0x buffer (25 pts).
₹3,000 risk budget divided by 25 points ATR stop equals 120 shares.
Assumptions & Parameters
- Quantities are rounded down to conservative whole integers.
Frequently Asked Questions
What is ATR-based position sizing?
A sizing method where share quantity scales inversely with market volatility.
Why trade smaller in high-volatility markets?
Wider swings increase rupee risk per share; trading fewer shares keeps total account risk constant.
How does ATR sizing equalize risk across different stocks?
A volatile stock gets a smaller share allocation while a calm stock gets a larger allocation, ensuring each trade risks the same amount.
What formula does this tool use?
Total Rupee Risk Budget divided by (ATR multiplied by ATR Multiplier).
Can this be used for index options and futures?
Yes. Multiply ATR points by contract lot size to determine allowable lot quantities.
What happens if volatility spikes after entry?
Your initial risk remains protected by your ATR stop-loss price.