The floating stop loss is calculated as a percentage off the highest price reached since purchase. But as you are beginning to learn, when a share price falls through a support line this is a strong sell signal. So what happens when a support line is within this 10% stop loss band? You need to sell on this break of resistance before the stop loss alarm appears. The way to bring this to your attention is to use the low alarm from the charts, as this warning will appear in the Portfolio and Chart Set Alarms sections of IntegraStock.

To illustrate this, we will use the example below. This stock rose to around $1.00 but hit an upper resistance level set a few months prior.

The share price was unable to penetrate this resistance for a few weeks, but at the same time had buying support at around $0.96. No one was willing to sell lower than this price but there was not enough demand yet to push the price higher. This did eventually come and the price continued into the uptrend. But what could have occurred in the share price did not rise? The first support line is at $0.96. The next support line is at around $0.85 (which would appear to the left of this chart). So if it fell through the $0.96 level, the next level it may free fall to is $0.85, as these are the areas where the share found strong buying support. The stop loss on the other hand is around $0.90, which is between these two levels. Breaking through support is a strong sell signal, so if you place a low warning alarm on any support line (ie $0.96) and the share price penetrates lower than this level, then it may be an earlier exit signal than waiting for the stop loss to be hit.

In summary, a low warning alarm should be placed on any level of support, especially if this is within your original 10% floating stop loss band. If the share price penetrates the low warning alarm, then this is an earlier exit signal than waiting for the share to fall the full 10%.