00:00A good day trading stop loss typically falls between 0.5% and 2% of account equity per trade,
00:07with the price-based stop usually set 0.25% to 1% away from entry, depending on the asset's
00:13volatility. This is not a fixed rule, but a risk management ratio. Professional traders commonly
00:19risk 1% of total capital per position, meaning if you have $10,000, you risk $100, and your stop
00:27distance is calculated backward from position size, not guessed arbitrarily. Approaches differ
00:32by method. 1. Percentage of equity stop, 1-2% rule, protects the account from ruin regardless
00:39of the instrument. Best for beginners since it enforces discipline over emotion. 2. ATR-based
00:45stop, 1-2x average true range, adapts to the stock's actual volatility. So a highly volatile stock like
00:53a small cap, gets a wider stop than a stable large cap like Apple. More accurate, but requires
00:58calculating ATR daily. 3. Technical-slash-structural stop, below support-slash-resistance. Placed at a
01:06chart level, e.g., under a swing low. Often more precise for entries, but can conflict with the
01:121-2% rule if the structural level is too far away, forcing a smaller position size. The right number
01:19changes with context. Scalpers trading 1-5-minute charts often use tighter stops, 0.1% to 0.5%.
01:27Because trade duration is short and leverage is high, swing-oriented day traders holding hours
01:33may use 1-2%. Low float or high volatility stocks, biotech, meme stocks, require wider stops or reduce
01:41size to avoid getting stopped out by normal noise. And traders using leverage, forex, futures, must
01:48recalculate the percentage against margin, not just account value, since a 2% stop on. Leveraged
01:55capital can mean a much larger real loss. I don't have verified current statistics on average retail
02:01stop-loss performance for 2025 to 2026, so treat any specific win-rate claims from other sources with
02:09caution. Practical takeaway, decide your max risk per trade first. 1% is a reasonable default. Calculate
02:16position size from your stop distance and adjust the stop based on the asset's ATR rather than a flat
02:22percentage across all trades. Finally, remember that everything we discussed today is for educational
02:28purposes only and does not constitute financial advice. Good luck to everyone and see you in the next video.
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