OMG I can't believe this fallacy still exists in trading!

Discussion in 'Trading' started by wxytrader, Oct 14, 2023.

  1. The article implies that the stock has only dropped 50% but has to recover 100% for you to gain your losses back, therefore implying that it is somehow harder for that to happen when it is not.
     
    #131     Oct 15, 2023
  2. You can do whatever you want. All I'm saying is that if it does, it will return to the same level with as much ease as it dropped.
     
    #132     Oct 15, 2023
  3. taowave

    taowave

    Old enough to drive his Daddys Lambo,cause he sure as fook never made 100k trading :)


     
    #133     Oct 15, 2023
    rb7 likes this.
  4. SunTrader

    SunTrader

    Well with him being an offspring, I can't see how Daddy's could have a earned enuf for anything eye-talian other than maybe a Fiat Geppetto.
     
    #134     Oct 15, 2023
  5. destriero

    destriero

    I crashed at Laguna Seca into the Armco barriers. You need to stop talking about your classic Lambo.
     
    #135     Oct 15, 2023
  6. schizo

    schizo

    This is not that hard concept to understand. In layman's term, it just means a stock will decline faster than it can rise. As a trader, I personally experienced 3 bear markets. Each time, the market took a nosedive that lasted anywhere between 12-24 months. But it took significantly longer to recover, usually double that time or even longer.

    What you're implying is that a given stock like GME can drop one day and recover the same extent the next day. While that is doable on a daily basis (or even weekly basis), it would be pretty damn difficult if it stretches out to the monthly or longer.
     
    #136     Oct 15, 2023
  7. SunTrader

    SunTrader

    Stairs up, elevator {shaft} down.
     
    #137     Oct 15, 2023
  8. Actually, I will be picking up my Lotus Emira 1st edition in March. :)
    This is the build.


    Lotus2.png



    Lotus1.png
     
    #138     Oct 15, 2023
  9. taowave

    taowave

    No,only a complete NOOB would would post that "if a stock drops 20%,it will simply have to rise by the same percentage to break even"...

    You are the only guy on this board who is confusing percentages with probabilities..

    You havent mentioned distributions,volatility or anything remotely close.

    Why not run a simple backtest purchasing stocks 50% off their 1-2 year highs and come up with a distribution of returns? Ill spot you survivorship bias..

    How much money have you made trading skew???








     
    #139     Oct 15, 2023
    rb7 likes this.
  10. taowave

    taowave

    #140     Oct 15, 2023