Here's my philosophy on how humans react to their own market performance, based on what I have observed. People who do well trading in the markets are quick to congratulate others who do well. It's the old high five celebration emotion coming out. Those who do poorly trading in the markets are bitter, envious, cynical and generally unaccepting of others who are doing well. So let me ask you all this? Which camp are you in??
It's hard to argue with MrMarket's success, but I do believe there is an argument in favor of stops, even for longer term holders. It sounds great to say you watch the fundamentals, but at the end of the day, a fundamentals-based analysis is dependent on data. That data is generated by the company, stamped by the accountants and massaged by Wall Street. We have witnessed a depressing series of scandals where we were utterly misled by these supposed fiduciaries as to the true state of the fundamentals. It needn't be criminal wrongdoing. Who can testify to the accuracy of FNM's books? Now in fairness, MrMarket has avoided these traps, and the type of companies he's involved in tend to be a lot more straightforward than FNM, TYC or ENE. But one of the base principles of technical analysis, one that I happen to subscribe to, is that price reveals all. If a stock is dropping steadily, one thing's for sure--it's not because there are big bucks buyers lining up. If the selling is heavy enough to turn the trend around and produce negative money flow, the chances are those sellers are a lot bigger than you and know a lot more than you do. Are they always right? Of course not, but in this game it pays to pick your fights.
Then there are those who are in the profitable camp who don't like to see misleading statements that may be taken to heart by newbies like "Cutting Losses - Not The Best Idea" ------ THAT IS GARBAGE!!!!
Garbage? Look at the first post in this thread and explain to me how I could have been so successful if I had cut my losses.
Price may reveal all, but one doesn't necessarily hear what price is saying, or he may hear something different from the person standing next to him. If a stock is dropping steadily, there may in fact be "big bucks buyers lining up", depending on the stock. When the price gets to the point they believe represents value, again depending on the stock, they buy, thus slowing or reversing the downward momentum.
from 1996 to the present crushes yours. Mine is already audited, and is more than a 6 figure account. OK. you want to make a bet? I know exactly where Don Bright offices are, and have no problem using him as an intermediary. What do you say?
You can do what you want with your trading. No one cares. But don't make these stupid statements for others to possibly attempt. Especially in a forum of mostly day and short term futuers traders.