Jack,
In my view, investments should be made based on fundamentals, with an eye on technicals to guide the entry and exit points. Trades should be made based on technicals, with an eye on fundamentals to determine the legitimacy of entry and exit.
Having said that, an investor who has done his or her homework in the research department need not worry about stopping losses--they expect the price of the stock to rise above the level they bought it, and time isn't as important a factor. For the most part, good stocks do just that.
A trader on the other hand is as interested in time as they are returns. The shorter the time in either a gain or loss position, the better. What people have to ask themselves is this: Am I an investor or a trader? The answer to that question depends on how much time you have. :) If you're willing to wait for your return, don't use stops, place market orders and wait for your due reward. If you're the impatient type, use stops and limits and pray that you've practiced the art correctly. |
