ATR-based position sizing uses the Average True Range, a measure of recent price movement, to set both the stop distance and the trade size. Instead of a fixed pip stop, the trader places the stop a multiple of ATR away from entry, then calculates the lot size that keeps the money at risk equal to the chosen risk per trade.
The effect is volatility-adjusted sizing: when a pair becomes more volatile, the stop widens and the position automatically gets smaller, so noise is less likely to trigger an exit while the loss stays constant. In calm markets the reverse happens. It makes risk comparable across pairs with very different typical daily ranges.
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Guide
How to Measure Risk Across All Your Open Positions
Risk per trade only describes one ticket. How to add up what your stops are worth, split the book into currencies, and read the margin figures the platform is already showing you.