First off,its clear that you are not a trader. You havent presented one argument backed by simulations,stats or common sense.Below is your quote.
Prove to us that ""it happens all the time? Define Easily??What percent EASILY retrace.? And why leave out half the equation?? What percent of the time does the stock that has fallen 50% keep on falling? Is buying a stock off 50% from its highs a good buy with a 100 percent profit target?? Is it a winning or losing strategy????
And how do you know that a stock that has fallen 50% wont fall another 50%????
Did you run a backtest???? I did...
If that wasnt enough,your reading comprehension is on par with your "research"..
Are you lumping in a Momo approach to trading with Deep Value DCF approach??
Are you saying a day trader/short term trader should have the same "investing style"/money management as a Dollar cost Average Investor??
Its a mathematical fact that a 50% drawdown requires a 100% gain to beak even..no more no less...
As its clear you dont trade,what would you advise the trader who employs 2-1 plus leverage???
Whats more likely,a stock doubling after going down 50% from its 1 year high,or going down another 50%?? Ill throw you the survivorship bone...
I ran it on the Russel 3000.....Lets hear it
KEY TAKEAWAYS
- Always think in terms of future potential—you can't do anything about the past, so don't depend on it.
- A selling strategy that's successful for one person might not work for somebody else.
- Once we own something, we tend to let emotions such as greed or fear get in the way of good judgment.
- It's important to think critically about selling; know your investing style and use that strategy to stay disciplined, keeping your emotions out of the market.
- A 50% drop means the position will need to gain 100% to return to the original amount.
