If you use stop losses then you are essentially gambling

[wxytrader]

You think I'll ever get a straight answer.

If you take an index or ETF then buying should be a process of averaging down, not a knee jerk trade to try to scalp some risk reward probability. This isn't a numbers game. It should culminate over weeks or months or longer sometimes. The point is you set yourself up for success by getting your break even as low as possible. I'm not talking about dollar cost averaging either...under no circumstances do I increase my break even.

 

[tomkat22]

I use stops because I dont feel like being a feckin Bagholder for months or years on end. Plus I dont have any guarantee the stock's price will ever return to my entry price. (do you really think PTON will see $171 again?)

 

[deaddog]

Really you have no risk holding cash? What if the price resumes after stopping you out early and you leave a 10 bagger on the table? You have essentially realized a loss of 10x

That's FOMO. You'd be surprised how many ten baggers I've left on the table.
I look at it as opportunity lost and I can afford to lose opportunity. Money not so much.

 

[wxytrader]

Trading without stop-outs is a game for noobs, fools and idiots.

So you limit yourself to intraday trading only? Why not just do one big swing trade? Oh yes...you like to tell all your friends you're a day trader.

 

[tomkat22]

Trading without stop-outs is a game for noobs, fools and idiots.

No it's for "investors" who finally throw in the towel on the position after it's down 95%. LOL

 

[wxytrader]

That's FOMO. You'd be surprised how many ten baggers I've left on the table.
I look at it as opportunity lost and I can afford to lose opportunity. Money not so much.

Yes but by missing the opportunity you lost money. Had you left the trade you might be up 10k...now you are down $200...so you are out $10200.

What I'm trying to say is if you add up all the profits you missed minus the losses you prevented using stops it is probably a wash. Chalk it up to market efficiency whatever

 

[tomkat22]

^^^It's not a loss because you cant lose something you never had. You cant lament "leaving money on the table". No one ever went broke taking a profit.

 

[Frederick Foresight]

"If you use stop losses then you are essentially gambling"

In other news, black is white, and up is down.

 

[wxytrader]

^^^It's not a loss because you cant lose something you never had. You cant lament "leaving money on the table". No one ever went broke taking a profit.

Well at the end of the year that trade could have made the difference between losing 10k or breaking even.

 

[deaddog]

What I'm trying to say is if you add up all the profits you missed minus the losses you prevented using stops it is probably a wash. Chalk it up to market efficiency whatever

That may be true. But I don't have to live thru the drawdowns and I have cash on hand to employ if another opportunity presents itself.