During one of our professional development days in early January our Title One Teacher conducted a small training on Guided Reading. She showed teacher how to level and what could be done after leveling students. According to Burkins and Yars guided reading should be kept to text that is on the child's higher end of instructional level (around 95% accurate). Students should be doing most of the reading and strategy work in their guided reading groups. Teachers should be providing scaffolding strategies and cues starting with the least supportive before trying the most supportive. Students should have lots and lots of reading success during the guided reading process. If you have to stop a student more than 5 times on one book per 100 words, it's too hard for guiding reading and more on their frustration level.
Guided reading is a time when teachers provide the least amount of support necessary for students to be show what they know for most of the the book but are not 100% independent with word word and focus skills.
When forming guided reading groups you can choose to work with students all on the same level or group according the the focus skill they are lacking. If you choose to group based on focus skills then each student would be using a different level guided reading book or possible their Accelerated Reading book which should be at their instructional level.