correct way to decide a Stop Loss (& the logic behind 80/20 movement of price)

Stop Loss (SL) is more of a mere statutory requirement especially if conviction is sky high and risk managed eg by trade size. 

a crucial fact about SL is that a trader can't put price-SL if trade taken on pattern of technicals instead of price. SL is to be decided on the same criteria which is used to decide the trade.

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many traders either miss out or wonder why markets move 80 percent in 20 percent time and why they languish for the remaining 80 percent time.

IMHO, besides the tactical dodge critical part, another key reason is that operators take that much of time to get the sheep on or off the train...

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the judgement of direction and patience are key signs of a non-bad trader...