ATR Volatility Stop — Volatility Drop
A Wilder-smoothed ATR trailing stop that ratchets with the trend and flips when price closes through it. One number, one line — but it handles your stop, your trend bias, and your flip alerts in a single study.
## What it does
- Computes Wilder's ATR and projects a trailing stop at `src − mult × ATR` (long) or `src + mult × ATR` (short).
- Ratchets the long stop up and the short stop down as the trend extends — never loosens.
- Flips trend when the source closes through the active stop, then re-seeds the new-direction stop on the flip bar.
- Colors the stop green/red by trend, prints up/down triangles on each flip, and tints the chart background by regime.
- Exposes two `alertcondition` triggers: one on each LONG flip, one on each SHORT flip.
## Recommended settings
- ATR Length: **14** (Wilder's smoothing — `ta.atr` already uses Wilder)
- ATR Multiplier: **3.0** (tighter = more flips; wider = fewer, slower flips)
- Source: **close**
## Ideal timeframe
Works on any chart; sweet spots are the daily for swing position management and the 15m / 1H for intraday trailing stops.
## How to use
Use it as a regime filter *and* a stop. Only take longs while the line is green and below price; only take shorts while it's red and above price. The flip triangle is the signal to flatten, reverse, or stand down — pair it with a structure level (prior swing, VWAP, daily pivot) for the highest-quality entries. On choppy days the multiplier earns its keep: bump it to 4.0–5.0 to ride through noise; drop it to 2.0 for fast scalps.
## Pine Script v5 code
```
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// │ MarketFragments.com | DNA & Market │
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// ATR Volatility Stop
// Wilder's ATR trailing stop with auto trend-flip and arrows + alerts.
// Free for non-commercial use. Tweaks and forks welcome.
indicator("ATR Volatility Stop [MarketFragments]", shorttitle="ATR Vol Stop", overlay=true)
atrLength = input.int(14, "ATR Length", minval=1)
atrMult = input.float(3.0, "ATR Multiplier", minval=0.1, step=0.1)
src = input.source(close, "Source")
atr_ = ta.atr(atrLength)
longStopRaw = src - atrMult * atr_
shortStopRaw = src + atrMult * atr_
var float stop = na
var int trend = 1
prevStop = nz(stop[1], longStopRaw)
prevTrend = nz(trend[1], 1)
// Update trend state on close-through
trend := src > prevStop and prevTrend == -1 ? 1 :
src < prevStop and prevTrend == 1 ? -1 :
prevTrend
// Update stop: ratchet in trend, re-seed on flip
stop := trend == 1 and prevTrend == 1 ? math.max(longStopRaw, prevStop) :
trend == -1 and prevTrend == -1 ? math.min(shortStopRaw, prevStop) :
trend == 1 ? longStopRaw :
shortStopRaw
flipUp = trend == 1 and prevTrend == -1
flipDown = trend == -1 and prevTrend == 1
plot(stop, "ATR Stop",
color = trend == 1 ? color.new(color.lime, 0) : color.new(color.red, 0),
linewidth = 2,
style = plot.style_linebr)
plotshape(flipUp, "Flip Long", shape.triangleup, location.belowbar, color.lime, size=size.small)
plotshape(flipDown, "Flip Short", shape.triangledown, location.abovebar, color.red, size=size.small)
bgcolor(trend == 1 ? color.new(color.lime, 92) : color.new(color.red, 92))
alertcondition(flipUp, "ATR Stop flip Long", "ATR Volatility Stop flipped LONG")
alertcondition(flipDown, "ATR Stop flip Short", "ATR Volatility Stop flipped SHORT")
```
Drop your tweaks, screenshots, and questions below — that's how the library gets better.