This command should be taught as soon as possible, and is usually covered in Puppy Training Classes. Again, this is taught with the use of a clicker. If you do not wish to use the clicker (though I highly recommend that you do,) follow the same procedure, but replace the click with the verbal "Good Boy / Girl."
To begin, the dog should be on a lead.
Have him in a Sit or Down, facing you.
Take a step away from the dog, whilst using your hand to signal "Wait." I use the universal signal of holding my hand in front of me, palm facing the dog. DO NOT USE THE VERBAL COMMAND AT THIS STAGE.
If the dog remains in the sit / down, step back to him, click and reward with a treat.
If the dog moves, do not speak (you CAN use a short "Ah" only IF the dog understands that this means he has done the wrong thing - as long as you do not use it as a punishment. It is a verbal cue.) Instead, return the dog (NOT forcefully) to his original position and ask him to sit / down again. Repeat the above until the dog is reliably staying.
Once the dog will stay with the hand signal, you can begin to teach the verbal command by saying "Stay" or "Wait" (choose ONE to avoid confusing the dog) before you click and reward, and adding "Good Stay / Wait" after clicking and rewarding.
You can then gradually increase the distance you move away, each time following the above procedure until the dog is staying reliably.
Once you have accomplished this, you can vary the routine, by walking around the dog, walking out of the room and back, calling the dog to you instead of you returning to the dog, etc.
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