Using ATR to Set Realistic Stops and Targets
A stop distance that makes sense for one stock can be way too tight (or way too loose) for another.
ATR (Average True Range) measures how much a stock typically moves in a day. A quiet utility stock and a volatile momentum name have very different 'normal' daily ranges - using the same flat-dollar stop for both makes no sense.
Setting stops and targets as a MULTIPLE of a stock's own ATR (instead of a fixed dollar amount) scales the plan to that stock's actual behavior - a wider stop for a naturally choppier stock, a tighter one for a naturally calmer one.
This is exactly how BullYeah's own Swing Conviction Board computes its Entry Zone, Invalidation, and Target levels - documented ATR multiples, not guesses, and not one-size-fits-all.
Compare the Invalidation distance (in %) on two very different Swing Board names - a calmer large-cap vs. a more volatile growth name. The dollar/percent distance usually differs meaningfully, scaled to each stock's own ATR.
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