Adaptive Risk Levels with ATR

🛡️ Risk Levels with ATR — Pine Script Description (for TradingView)

Overview:

This script helps traders visualize dynamic risk levels based on the Average True Range (ATR). It calculates stop-loss and take-profit zones relative to current price action, adapting to market volatility in real time.

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🔧 Key Features:
• ✅ Dynamic Risk Bands: Automatically plots upper and lower risk levels using the ATR.
• 📈 Volatility-Aware Zones: Adapts to changing market conditions — wider in high volatility, tighter in calm markets.
• 🎯 Customizable Multiplier: Control how aggressive or conservative the risk zones are.
• 🕵️‍♂️ Ideal for Swing & Day Trading: Helps define entries, exits, and stop placements.

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📐 How It Works:
• The script calculates the ATR (Average True Range) over a user-defined period.
• Then it draws:
• Upper Risk Level = Close + (ATR × Multiplier)
• Lower Risk Level = Close - (ATR × Multiplier)
• These bands represent risk boundaries — useful for:
• Stop-loss and take-profit calibration
• Volatility-based position sizing
• Breakout or mean-reversion signals

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⚙️ Settings:
• ATR Period – Length for ATR calculation (default: 14)
• ATR Multiplier – Adjust how far the risk bands are (e.g., 1.5x, 2x)

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Example Use Cases:
• 📉 Stop Loss: Set your stop just below the lower band in long trades.
• 📊 Take Profit: Use upper band for risk-reward calculations.
• 🚨 Breakout Entry: Confirm breakouts when price exceeds upper/lower band.