How do I determine where to put my stop loss?

Seasoned traders use stop loss to protect themselves from making losses. It is always better to insert the moving average and then set your stop loss below the moving average. For example, if you own a stock trading at $50 and the moving average is $45, you should then set your stop loss just below $45.

So, 7% of $800 is $56, making your stop loss at $740 from your buying price.

It is relative. Relative to account size, relative to time frames you work on.

It is generally safer to risk 1% of your equity. Translate that into how far your stop should be.

Say you trade the forex market, and 200 dollars is 1% of your equity; that translates into 20pips on a 1 lot size, 200 pips on a 0.1 lot.

Also, safe points to put a stop is generally below swing points (low/high) but then again these are target point for the market.

This is a common problem for investors. It all depends on what strategies you use and your comfort level (trading and prices):

• The Moving Average Method: Your stop loss is set below the moving average level. If your stock is trading at $25 and the moving average is $20, your stop loss should be a little bit below the moving average.
• The Percentage Method: Pick a percentage of the stock price you are willing to concede when exiting your position.
• The Support Method: Here you pick the stock's recent support level. For example, if your stock is trading at $100, and you think $90 is the most recent support level, you want to choose an amount slightly below to have some breathing room.

Others will recommend that you exit the trade when you are feeling greedy and take the profit level you initially intended.

Just remember that you should refrain from using stop losses for large volumes of stock and if you are an active investor. Also, if you are a long-term investor, holding, let's say Walmart or Ford, you do not need to employ stop losses.

A stop-loss is a great strategy to secure the investor's loss at a particular margin. A lot of experienced investors use stop-loss to minimize the loss in the stock market. If you invest a big sum, then you can limit it to 7%, but with a small investment, you can take more risk.