A stop loss should sit where your trade idea is proven wrong — not at a random amount you are willing to lose.
Three common methods
- Structure: beyond the swing high/low or level that defines the setup.
- Volatility: a multiple of recent average range (for example 1.5× ATR) so normal noise does not stop you out.
- Time: exit if the trade has not worked after a set number of candles.
Then size the position
Place the stop first, then calculate the volume so the stop costs your chosen % of equity. Never move the stop further away to "give it room" once the trade is open.