Average True Range Stop Validation

Enter your desired working stop-loss amount. Two lines are plotted representing the current bar high/low plus the average true range of the underlying (or any multiple thereof). If your desired stop amount falls within the boundaries of the envelope, the plot is blue. When the volatility increases such that your stop is probably insufficient, the plot turns red.

Average True Range Stop Validation

# ATRSTOPS
# http://thinkscripter.wordpress.com
# thinkscripter@gmail.com
# Last Update 18 Jan 2009

input ATR_Multiple = 1.0;
input Desired_Stop_Loss = 1.0;
input ATR_period = 30;

def val = AvgTrueRange(high, close, low, ATR_period)*ATR_Multiple;

def tooVolatile = if(val>Desired_Stop_Loss,1,0);
def plotColor = if(tooVolatile,5,1);

plot LongStop = low-val;
LongStop.AssignValueColor(getColor(plotColor));
LongStop.setStyle(curve.SHORT_DASH);

plot ShortStop = high+val;
ShortStop.AssignValueColor(getColor(plotColor));
ShortStop.setStyle(curve.SHORT_DASH);