[mongoose1969]

It depends whether you are a trader or an investor, as the stop positions for both are very different. If I assume that you're an investor then the stop loss position is a long way a way currently, and the stock is in Stage 2B with three continuation moves in the last year since it's Stage 2A breakout. So I believe the book suggests taking some profits off of the position when it's extended after such a great Stage 2 run, as it is in the later stages of a normal holding cycle of up to 12 months.

The reason for the wide stop losses in the investor method is that they are more disaster prevention stops imo, as you need to allow stocks to make natural corrections based on their own normal volatility when they get extended to give the change for the moving averages etc to either catch, or pullback all the way to test previous lows. Think about it a different way. AMZN is currently 89% above the Stage 2A breakout level in under a year, and has already had one 22% correction, which if you'd had a tighter stock than the investor stop method suggests, would have made you miss the additional 42% of the up move.

I'd say as an investor the stops are there to protect you from disaster, and are not the same as trader stops, so only put them where you are willing to actually give up on the investment. Of which the investor method stop is a good guide imo.

So make you own decision on how to proceed. But I recommend re-reading the stop loss sections in the book and looking at historical examples of stocks in similar positions.

Thanks! You are correct in your assumption. I'll be working this strategy from an investor point of view. I understand where the initial stop loss should have been (had I known about this strategy a year ago) and was working through the chapter to make my decisions about the trailing stop loss set points. I appreciate you bringing up the point of a holding cycle lasting about 12 months which will cause me to consider my current position stake.

For now, I'm going to protect myself at the previous continuation move. and see what happens. Off to re-read!