This is the price at which you will want your broker to sell the stock, should the market change abruptly, in order to preserve your capital and prevent further losses.  Trending Stocks calculates the Stop Price based on the most recent volatility in the stock’s price.  If you simply used the recent volatility to set the Stop Price it would result in the stock being sold within the next few days in most cases.  Therefore, Trending Stocks applies a multiplier to the volatility to arrive at a Stop Price that will tolerate reasonable price changes before generating a sell signal thereby allowing you to hold the stock through normal turbulence.