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Adaptive Volatility Stop by Pedro Paulo de Melo

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Stop ATR is a clean and reliable volatility-based trailing stop system, built to adapt dynamically to market conditions using the Average True Range (ATR).
It identifies trend direction, adjusts the stop level using stair-step logic, and automatically flips the stop when price reversals occur.

How it works

Uses ATR × Multiplier to calculate an adaptive volatility buffer

Tracks trend direction internally

Recomputes and repositions the stop when a trend flip is detected

Plots separate lines for bullish and bearish stop states

Works on any market and timeframe (crypto, forex, commodities, indices, stocks)

Why it’s useful

This Stop ATR implementation is extremely stable and visually clean.
It is particularly effective for:

Trend following

Position management

Swing and position trading

Systematic stop placement

Unlike many ATR-based stop versions, this script uses a corrected flip-handling method that prevents stop misalignment and ensures consistent trend state tracking.

Inputs

Period — ATR length

Multiplier — ATR factor that defines stop distance

Author

Developed by Pedro Paulo de Melo, open-source version.
Notes de version
Addition of the disclaimer "code is subject to the terms of the Mozilla Public License 2.0 at mozilla.org/MPL/2.0/"

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