Doodman and fast, thanks for the detailed responses.

I had a very similar thought process to Doodman's and I feel more confident now that it's confirmed. It just didn't make sense to add a stop loss based on a set percentage while ignoring price action. It almost feels ignorant to just ignore the chart right in front of your face and place an arbitrary stop loss. Your post definitely helps.

Fast, your reasoning makes good sense and has given me insight to think about the exact price to add a stop loss- especially the last sentence. I'll give this thought when adding stop losses from now on. The example took a few tries to follow (relatively new to trading), but I think I got it. Much appreciated.

Thanks to both of you, I have a much better understanding now.