What is the 7% rule in stocks?
Understanding the 7% Rule in Stocks According to this rule, if a stock falls 7–8% below your purchase price, you should sell it immediately—no exceptions. In my experience, The 3 5 7 Rule of Stocks is almost magical! Never risk more than 3% of your total capital amount on a single trading position. The total risk for all positions should not exceed 5% of the trading capital. Each profitable trade should bring at least 7% more profit than each losing trade.