I assume you are refering to price stops. If so, this is a very narrow viewpoint. I understand that people develop these beliefs to limit pain, but they will also limit you as a trader. I have systems that I trade that do not use price stops. I would encourage everyone here to be open minded about other methods of limiting risk, as someone else already mentioned. If you are new to trading and/or doing discretionary trading you may need stops to keep you sane, but if you are doing automated/systems trading there are many ways to limit risk in a system that MAY be better for that system than price stops.
The people who were long and smart took profits before May 6th. The up trend line broke down in late April and the breakdown was confirmed before the May 6th "flash crash". Also, if you were day trading that day, there were no long signals leading into the crash. I was watching carefully for a long signal because I thought the market had sold off a lot leading into May 6th and there was not a long signal to be found.
I'll agree when disaster strikes prices can in fact, blast through a hard stop (which becomes a market order) and the skid can be painful. However, the notion of a lock limit market is real. I know a guy who was caught lock limit in gold for a few days. The only move each day was limit against him. I always use a stop of some kind. I've built (4) systems (that work) and have reams of ideas. All my systems use working stops and a "system stop loss." That is, if it losses exceed $ xxx.xx (in relation to proven forward tested profits and drawdown) I pull the plug and either go back through the testing process and make adjustments or scrap the system. Remember your loss is another trader's profit..................... I remember a story after the 1987 "crash." Some trading firm in Chicago made over a BILLION dollars in a few days!! The "Boss" gave everyone a bonus and a month's paid vacation, then closed the shop for a month. Everyone knew it was a fluke, a windfall profit.... but profit is profit. You'll figure out what you'll need for you and your market. <*)))><