Where to put the stop

Two schools of thought, and the honest answer is: use structure to decide where, and risk to decide how much.

Structure first

A stop belongs at the price where your reason for the trade is no longer true — below the swing low you are trading from, under the level you bought, or at a fixed volatility distance (like 1.5× ATR). That is a market answer.

Then size, from the stop

If the structural stop is 8% away and that would mean an uncomfortably small position, the trade is simply a smaller trade. It is not a reason to move the stop closer.

The three mistakes

• Choosing the stop to fit the size you wanted. This inverts the logic and is the most common cause of outsized losses.
• Placing it exactly at the obvious level. Round numbers and obvious lows get swept. Give it a little room beyond the level.
• Moving it away. A stop is a decision, not a suggestion. Widening it converts a planned −1R into an unplanned −3R.

Rule it out with the position size tool before you click buy, and check the total open risk in the risk manager.