The STAY Instruction: "Freeze in that exact position until released."
Begin by teaching sit and down. If the dog does not know these Instructions, teach these first and practice until the dog will perform for praise alone, without any food.

First Choice Method
1) Any time you see the dog relaxed, and laying comfortably around the house, begin to introduce the word "STAY" then begin praising as if the dog had done something great. If the dog starts to get up to come to you, say COME and praise the come. If he stays, praise STAY. He can't lose! The goal is to introduce the sound STAY as a positive.

2) Begin to teach the more formal STAY while standing in front of the dog. Start by requesting a SIT, but don't let the dog know you have food.

3) Put your (non-food holding) hand in front of the dog's face in a stiff arm, open hand position, as if your were indicating "STOP" to a driver coming toward you. As you move your hand to this position, say STAY.
 

Do not back away from the dog until he can "stay" for at least 15 seconds when you are right in front of him.  Begin by taking one step back, then forward to where you started.

4) Hold for one second, then praise if the dog did stay. If the dog moves, say COME, SIT, and try again. Start with rewarding short periods of stay and gradually increase time by seconds and increase to minutes. If your dog moves, keep a patient good humor, and simply put back into position.

5) The most effective correction is given just before the dog changes position. Verbally REMIND him with a "STAY" if you sense he is about to move, quickly praiseand release. Work in short, successful sessions.

6) While he is staying, periodically repeat the words, "Good stay" in a soothing reinforcing tone. This is called an "Instructive Praise" where the dog is rewarded for DOING the Instruction, WITH the Instruction word in a praising tone.

7) When reliable, the hand signal communicates the instruction, but once the Instruction is given, the stay continues until released. Choose a release word such as "OK!" or "All done!"

8) Do not back away until he is reliable when you are right in front of him for at least 15 seconds. Begin by taking one step back, then moving forward to where you started. Then take two steps back, then one step to the right, then to the left and then work toward walking around and further away from the dog. Most people try to go too fast. Take it in baby steps.

Do not walk away from the dog until you can walk all the way around the dog at a distance of a foot or two without the dog moving.

Second Choice Method
Using a leash, position the dog sitting at your left side, with the leash in a straight line up into your left hand. With your right hand give the flat hand in front of his face "stop" sign, and say STAY. Step immediately in front of the dog to prevent his moving, and slacken the lead. If he moves, use the leash to put him back into position. Keep it upbeat and encouraging, and praise as if it was his idea. Work toward your encouragement keeping him in place instead of the leash.

After one of two seconds, give your release word, and walk to a new spot and practice again. Practice in a variety of places and locations, or the dog will only learn to stay in one context.