SAO's Stop Loss Policy
It is important to note that while Stock Advisor Online provides quality stock tips, only 80% to 90% of our picks provide substantial gains.  For this reason, it is important to have a system that keeps you in the Market if a trade goes wrong.  This is where a Stop Loss Policy comes into play.  There are two methods to instituting a Stop Loss, both of which we will discuss below:
  
2% Stop Loss
The first Stop Loss Policy is the 2% Stop Loss.  This means that you never risk more than 2% of your capital on a single trade.  For example, if you have $50,000 in the market, you plan your trades so that you never risk more than $1,000 on a trade.  If you are considering buying 1,000 shares of a $20 stock than your Stop Loss Point will be $19.  That way, if the stock goes down to $19,  the stock is sold at that price and you have only lost $1,000 of your original $50,000, leaving you with $49,000 with which to continue trading. 

Purchase Price Stop Loss
This method employs a chart that determines what your Stop Loss is depending on how much the stock costs per share: