If you use stop losses then you are essentially gambling

[wxytrader]

I use stop losses on every trade.
I don't think of it as gambling. I prefer to think of it as risk control.

Take the Vegas situation. It's the customer vs the casino. Both are playing the same game. On any one spin of the wheel, pull of the handle or deal of the hand, you don't know who will win.

Do you think the casino is gambling?

Then you are day trading...you have much bigger problems to deal with than stop losses. The only thing that separates trading from gambling is with gambling you have to realize losses ..with trading you don't...unless you use stop losses. Thus the comparison.

 

[SimpleMeLike]

%%
LOL but Risk of Ruin on bitcons+ cons is unlimited ;
even single stocks can only go to zero unless dumb enough not to use stops + dumb leverage.................................
Some dont use top on RE , but that's not gambling , not anywhere near gambling

Thank you murray t turtle for the response.

I would like to hear what @wxytrader have to say to the questions as well.

 

[murray t turtle]

Murray T;

What's your take on stop losses? What does Dave say?

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I use stops , but I dont gamble;
as far as business goes/ no such thing as business with out losses[expences LOL.]
Dave ramsey limits his losses ;
1]mainly with REALOR liscense + lots of buys LOL
2]He limits dumb stuff by not ignoring his wife 'her feelings-in tuition on that home turned out to be a nightmare loss.......................''
3]diversification time , in stock market
4-9] 5 fund types
10]Radio business
11] promotion disclosed with his ELP endorsement
12]Stays away from cons mostly LOL
13]Book royalties
14 ]Self published books
15]Some SPY
16] Limits loses with no e debt\leverage , never....................

 

[wxytrader]

Thank you murray t turtle for the response.

I would like to hear what @wxytrader have to say to the questions as well.

Averaging down is essentially like having a dynamic stop price. But instead of actually getting stopped out of the trade you just keep reducing your break even which is ultimately what every stop loss wishes to achieve...to stop out at a break even.

 

[ZBZB]

I could have won that by simply placing one swing trade with only averaging down no stop losses.

But you didn’t!.

 

[deaddog]

Then you are day trading...you have much bigger problems to deal with than stop losses. The only thing that separates trading from gambling is with gambling you have to realize losses ..with trading you don't...unless you use stop losses. Thus the comparison.

But I'm not day trading, I'm swing/position trading.
And there are times that you have to realize losses when you are stock trading.
A company goes bankrupt. (Enron)
A company drops in price and gets bought out in an all cash deal.
A company gets taken private.
Not to mention the company that drops in price and stays there. Ties up your capital for years.
You can't tell me what your portfolio will be worth tomorrow or at anytime in the future.
You are letting the market control your investments rather than having control yourself.

 

[wxytrader]

But you didn’t!.

Competitions don't attract the most talented competitors, they attract people who want to be known as the most talented competitors.

 

[deaddog]

Averaging down is essentially like having a dynamic stop price. But instead of actually getting stopped out of the trade you just keep reducing your break even which is ultimately what every stop loss wishes to achieve...to stop out at a break even.

Where do you get the money to average down?
Where would you be if you averaged down on a stock like enron?

 

[SimpleMeLike]

Averaging down is essentially like having a dynamic stop price. But instead of actually getting stopped out of the trade you just keep reducing your break even which is ultimately what every stop loss wishes to achieve...to stop out at a break even.

Hello wxytrader,

Thank you for response. I agree your statement and respect your style of trading.

 

[wxytrader]

But I'm not day trading, I'm swing/position trading.
And there are times that you have to realize losses when you are stock trading.
A company goes bankrupt. (Enron)
A company drops in price and gets bought out in an all cash deal.
A company gets taken private.
Not to mention the company that drops in price and stays there. Ties up your capital for years.
You can't tell me what your portfolio will be worth tomorrow or at anytime in the future.
You are letting the market control your investments rather than having control yourself.

The only thing you control in the market is your risk exposure.