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If a $10 stock has dropped by 50% to $5 it will have to recover by 100% to return to $10. Do you think this makes your chances of recovering your losses less likely?

Evora--->corvette c8---->Lambo--->Emira

The article used 50% as an arbitrary number to use as an example. Obviously if a stock drops 50% it's a capitulation and you will have to wait for a recovery. The part about the article that makes no sense is showing that after only a 50% drop, the stock/portfolio now has to recover 100% just to...

it's not the same as Monte Carlo or gamblers fallacy because they have to do with the odds of the same result happening again diminishes every time it repeats. I will try again. The traders fallacy is the belief that once a stock drops 50% it will be harder to recover your losses to break even...

You are completely missing the point of what a traders fallacy is referring to.

Well then what's the point of the article? Your portfolio's ability to recover is completely unaffected by the entire scenario they are referencing.

You are completely missing the point of the entire topic...and nobody is saying that....and only the people who are suffering from traders fallacy are mixing up percentages with probability. That's actually the fallacy.

Actually, I will be picking up my Lotus Emira 1st edition in March. :) This is the build.

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.

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.

Sort of correct..as far as not relying on erroneous math to justify your opinion.

You are not even in the relm of the conversation.

Exactly..they just don't seem able to grasp the concept. You are better at giving examples than I am so perhaps I should let you carry the torch from here. :)

The concept is the same whether it's a 50% drop or a 2% drop.

Y'all need to read the first post to get back on track about what is being discussed. You have all gone off on tangents because you can't grasp the concept of what the traders fallacy is.

You need to forget about fundamentals as they are not only irrelevant 99% as far as price action...they are also irrelevant to the discussion.

If a stock is trading at $10 and was now trading at $5. Mathematically the stock price only dropped by 50% but now needs to increase by 100% to return to $10. Does this mathematical disadvantage come into play as far as the chances of you regaining your loss?

You're getting close to understanding it. Would you say that a stock that was once a $100 and was now a $50 stock needs a lot more external force to return to $100 than it needed to drop to $50? (Think of this as in a trading range not so much as a capitulation for simplicity)

Why did it take 5 years? I am going to have to walk you through this...

Time is irrelevant here. The point is that the price can return to $10 just as easily as it dropped to $5 with similar external factors as mentioned.