The moving average method is another way to set a stop loss percentage for day trading. The idea is to use a moving price average as your stop loss level. A moving average is a technical indicator that shows the average price of a security over a certain period. It smooths out the price fluctuations and shows the general direction of the trend. The advantage of this method is that it adapts to the changing market conditions and follows the trend. It also helps you avoid getting stopped by minor price corrections or consolidations. The disadvantage of this method is that it may lag behind the actual price movements and set your stop loss too far away from your entry price if the trend is strong.