Every figure this video puts on screen, and where it comes from.
Three kinds of number appear, and they are labelled on screen as they appear:
Nothing here asserts a historical result, a win rate or a backtest, and no figure in this video is presented as measured from a real price series.
True range is the greatest of three measures: the bar’s high minus its low, the absolute distance from the previous close to this bar’s high, and the absolute distance from the previous close to this bar’s low. Average true range is a smoothed average of that.
The indicator is J. Welles Wilder’s, introduced in New Concepts in Technical Trading Systems (Trend Research, 1978).
The 14 period setting. Fourteen is the platform default and the most common choice rather than a law of nature. TradingView: “The look back period to use for the ATR is at the trader’s discretion however 14 days is the most common”, and 14 is the default in its inputs. The video shows ATR 14 and says the number belongs to the timeframe it is measured on.
Over n bars, the distance price covers grows with the square root of n, not with n.
This is the square root of time scaling of a driftless random walk. It is the same rule supervisors use to scale a one day risk figure to a ten day one, by multiplying by the square root of ten.
The ladder on screen, 1 bar 2.0, 4 bars 4.0, 9 bars 6.0, 16 bars 8.0 pips, is that rule applied to an ATR of 2.0 pips. Four times the bars, twice the distance.
Ten bars gives ATR times the square root of ten, about 6.3 pips. Same arithmetic, 2.0 x 3.162.
Why the range and the deviation are not the same number. The expected high to low range of a driftless random walk over a period is the square root of eight over pi, about 1.60, times its standard deviation over that period. Converting between the two is what lets an ATR reading be used in a probability rather than being compared to one.
A stop d away is touched at some point within n bars with probability twice the normal probability of finishing beyond it. This is the reflection principle for the running minimum of a driftless random walk: the path reaches a level with twice the probability that the endpoint is beyond it, because every path that reaches the level and comes back pairs with one that reaches it and carries on.
Applied to an ATR of 2.0 pips over ten bars, that gives the two figures on screen:
| Distance the market has to travel | Chance it is touched within ten bars |
|---|---|
| 3 pips | 45% |
| 7 pips | 8% |
And the pair used for the two hours:
| Hour | ATR shown | Chance a 4 pip stop is touched |
|---|---|---|
| Quiet | 1.0 pips | 13% |
| London and New York overlap | 3.0 pips | 61% |
Both rows follow from the model alone and are reproducible from it. They are labelled on screen as simulated, and the ATR values they use are labelled illustrative.
You buy at the ask and sell at the bid, so a round trip crosses the spread. This is the definition of the two quotes rather than a claim about any particular market.
A stop on a long position is checked against the bid, not against the price you paid. MetaTrader 5’s own documentation: “This order condition for long positions is checked using the Bid price (the order is always set below the current Bid price) and the Ask price is used for short positions (the order is always set above the current Ask price).”
That is where the arithmetic on screen comes from. A stop set four pips below the fill on a one pip spread is three pips from where the bid was at entry, because the bid started one pip below the fill. The spread is a fixed subtraction, so it takes a quarter of a four pip stop, an eighth of an eight pip stop and a twentieth of a twenty pip stop.
A touch is enough. A stop order becomes a market order the moment the trigger price is reached; nothing has to close beyond it. Nasdaq’s glossary: a stop loss order is “an order to sell a stock when the price falls to a specified level”.
The one pip spread used throughout. Retail standard account spreads on EUR/USD sit around this level and vary by broker and by account type. Broker testing published in 2026 put the all-in average across a field of retail brokers at about 0.86 pips on EUR/USD, with standard accounts commonly quoted between 0.8 and 1.6 pips. One pip is a round number in that range rather than any single broker’s figure.
The spread is not a constant. It widens with volatility and around scheduled releases, which is what the video shows happening to the distance a stop really sits at.
Activity in foreign exchange is concentrated in the hours when the two largest centres are both open. The Bank for International Settlements’ Triennial Central Bank Survey for April 2025 puts the United Kingdom at about 38% of global foreign exchange trading and the United States at about 19%, the two largest shares by a wide margin, with global turnover at 9.6 trillion dollars a day.
Within a day, volume, quote revision and volatility move together, and the spread moves against them. Ito and Hashimoto examined firm quotes and transactions on an electronic broking system and confirmed a U shape in intraday activity for Tokyo and London participants.
The hour by hour profile drawn on screen is labelled illustrative. It carries that shape, quietest through the late Asian hours and heaviest across the London and New York overlap, and it is not a measurement of any particular day.
One standard lot is 100,000 units of the base currency, and on a pair quoted to four decimal places against the dollar one pip on that size is ten dollars.
From that, with a fifty dollar risk budget, which is one per cent of a five thousand dollar account:
| Stop | Risk per pip | Size | Spread paid on a round trip at one pip |
|---|---|---|---|
| 4 pips | 12.50 | 1.25 lots | 12.50 |
| 8 pips | 6.25 | 0.63 lots | 6.25 |
Both positions lose the same fifty dollars if the stop is reached. The wider stop is the smaller position and crosses the spread at half the cost.