Jesse Livermore is the LAST person who should talk about raising cash considering that he made his biggest fortune the other way, giving up cash to speculate.
Some people have a better track record of predicting than others. Few or no one gets it right all the time. Otherwise, you could make the same argument about poker. Try arguing that there is no advantage in poker since the cards are given out randomly. A good poker player doesn't (usually) know for sure if he has the best hand or not. But good poker players know when to risk more and when to risk less based on their perceived conditions. Same with trading or even investing. There are times when it's less risky to be in the market (long or short) than others.
While I totally agree with your eight points, thank you for the article, it looks for me important to give some light on the question about why Wall Street is so adamant to keep you in cash. I am not speaking as an investor in the USA, but as damaged hit investor through Suisse banks BNP Credit Suisse, Paribas, and UBS. We keeping money on Wall Street and for the brokers it very clear what is indicated your point five, 80 percent of investors sadly losing. The banks, which in our case were our brokers, simply will not send our orders to the exchanges. Till now - from 2209 and 2012, we have not seen even one regular report with the exchgnages numbers, clearing house etc, all what we are having now with AMP furtures. We received from them only so-called, trading advises. And we are not able till now to bring them to the court. this scheme, if we understand well, was largely used by many brokers before Madoff's case and it is stopped now in USA and other regulated countries, but here in the Bahamas or in Switzerland it still is the same. And when you are in losing position they will never urge you to sell, even the concept of stop losses was not shown to us in 2009! But when our positions were starting to grow they would call and call and call until you will liquidate, even if we had no margin. the answer to why of this behavior can be only one - once you are gaining, they are losing because they never opened position. Why the trader in the USA should care - I think that at a side of normal desire for justice and transparency those are also tonnes of capitals stollen by banksters from professional traders. Once the exchange is a balance game, novice wealthy individual are coming to the market he obviously will have to learn through the pain of loses. But those losses are never seen by professional traders- they are stopped by white-collars criminals, who risking notghing and operating in violations of all modern regulations.
Good article - I can see how one can take the view held on point # 6, but for me, it's no more difficult to determine a downward trend than an upward trend. Some would point out that upward is more pre-dominate than downward, which is true, but still ... I'm not a fan of that line of thinking. I do strongly feel one should keep his cash and paper trade until he is profitable on both upward and downward movements.