Similar to the engine oil dipstick, the transmission is also equipped with a separate dipstick. The transmission dipstick is used to determine the level of ATF or automatic transmission fluid inside the oil reservoir. The automatic transmission requires the right level of ATF to perform optimally. Either a loss or excess of fluid might result in mediocre performance and transmission damage. The ATF is not only used to lubricate the vital moving parts inside the transmission. The fluid is also utilized to effectively cool the hot components in the transmission. The fluid is continuously pumped to the transmission coolers to lower the temperature of the ATF. It is a good idea to check the fluid level of the transmission whenever you check the oil level of the engine. Significant fluid loss is a cause for concern and should be diagnosed immediately.