[isatrader]

The next stop loss examples from the March 2012 GTA is BAC, which was recommended to do buying on a close above 8.35, which it was said would complete the Stage 1 base pattern and hence the signal to do buying. The Trader Stop Loss was given as 7.59 and the Investor Stop Loss was given as 6.39

Trader stop - on the daily chart the last pivot low was 7.67 and 7.66, and so the 7.59 suggested stop loss position was just below the pivot low. But wasn't placed below the half point on this occasion, even though it was close.

Investor stop - 6.39 was the recommended level, which was right below a minor swing low of 6.41. The 30 week MA was at 6.67 and so it was also under this, which was just beginning to flatten after a steep decline.

ATR distance to stops - For BAC the ATR(200) was 0.395 at the time of the recommendation and so:

• 1.92% ATR - Trader stop distance
  
• 4.96% ATR - Investor stop distance
  

Other observations - BAC had seen an increase in volume during the Stage 1 basing phase, which had been consistently above average for around 6 months or so. Relative performance versus the S&P 500 was recovering and close to the zero line. The 30 week MA was only just beginning to flatten after a fairly steep downtrend, and six month base. So a break above the 8.35 level would have been an early breakout from a smallish base. It had fairly strong resistance at the 11 zone, where it had bottomed in 2010. Good risk reward on the trader stop though, especially for a breakout entry.

BAC made it's Stage 2A breakout two weeks later (see latest weekly chart attached) with a 20% move higher (4.43% ATR), but then quickly stalled and fell through April and May 2012 to a low of 6.72, and formed a double bottom over the next few months and broke out again in September 2012 and has been in a steady uptrend since then. So the investor stop loss held well and currently would be at just under 10 imo, after being raised three times since last March. With BAC in Stage 2B- currently. I've marked up on the latest chart where the investor stop would have been raised to during it's Stage 2 run in my judgement.