Is it a certain percentage (2, 5, 10 or 50 percent) of a trade size margin, unmargined cost or an account that provides of a good stop?
I don't think a percentage is the way to set a stop. A stop is that point at which you are proven wrong in your assessment of where the trade will go. FWIW: I perfer to be proven right. If not then just abandon the trade.
%% WON used a %; good . 7 or 8% max max stop on single stock ; 50% sounds too much. EVEN though one fund was named ''60% drawdown, did well for several year, dont know if they blew up or not. Most trend followers may average more than 7-8% stop; except Scott Ramsey uses less. Dave Ramsey use no stop in stock market but buys diversified funds most of which average > SPY benchmark/long term average.............................................. I also like WO'N suggestion, not a rule, sell the worst + or lessor of the gains, usually. SOME trend folloWers in RE never use a stop; i used a time stop when selling RE thru a REALTOR +worked well+ seldom hit that time stop, property usually sold
CTAs might use a multiple of ATR (2,3,4x) I don’t know for sure and they might use different strategies. If you know how to read a chart and your stuff isn’t automated then go with @deaddog Otherwise you can assume your position can go to zero. Don’t use stop and deleverage.