The accepted figure is 5% for LONG TERM traders who have a portfolio where they dont risk any more than 2-5% of thier total assetts on any one trade. they also might hold 20 stocks and make 1-4 trades per month.
More aggressive traders like me run 8-10% stop loss. Thats all there is, apart from using a 'trailing stop loss' where you adjust it as your stock rises.read up on Darryl Guppy for more info on that concept.
Forrest, I disagree with taking volatility into account for stop losses. One bet is the same as another. I think you should run the same % on all your trades. It helps make you a better money manager in the long run. Id rather use the ATR as an entry indicator and try to increase my success rate that way. I like the pure maths of keeping all bets the same amount and same stop loss.I usually risk the same dollar amount on option trades.
