How to use ATR to set stop-loss?

As a keen investor in the cryptocurrency market, I'm often faced with the challenge of balancing risk and reward. One tool that I've heard about but haven't fully grasped is the Average True Range (ATR). Could you elaborate on how ATR can be utilized to effectively set stop-loss levels? Specifically, I'm interested in understanding how to calculate ATR, interpret its significance, and ultimately leverage it to set appropriate stop-loss orders that mitigate potential losses while still allowing for healthy profit potential. Your guidance in this matter would be invaluable in my trading journey.