Hmm might be but we also can understand the market movement from our own feelings if we are in control of it.We have to just act to the opposite of what we are doing that is how whale move the market,having stop loss can save us from great losses but we still have to active to be in profits that is what a trader supposed to do
It has been tried out already, and no, it doesn't appear to work. For example, you are inevitably losing in the long run, so you set up a system which automatically changes your orders into their opposites without you even being aware of it (or someone else sets it up for you to try out this approach). So when you buy something, the system sells it, and vice versa (let's assume you can both sell and buy)
Does it mean you will stop losing?
Not from every losses but it can save us from serious losses when the whales dump the market
We can know that only in hindsight
Unless we have insider info which we typically don't (I mean, en masse). As an illustrative example, when the price of some cryptocurrency starts to move down big time (think Bitcoin here, for simplicity's sake), we essentially have three modi operandi (plural of modus operandi, i.e. a particular way of doing something), which are described in detail below. Maybe someone can come up with something entirely different
First, we can do nothing, i.e. wait out the bad times and hope for the best, in this case, for the price to recover (eventually or otherwise, sooner or later). It may pan out but as easily it may not. For example, those who bought at anything above 15k are still deeply in red, and many of them have already lost all hope and called it a day by fixing losses (so much for doing nothing)
Then, we can sell immediately and thus prevent losses from accumulating and multiplying. But this is not a panacea either since, as I said, we can only measure the bottom once we have touched it and rebounded from it. In other words, selling in these circumstances can in fact turn out quite counterproductive, and instead of preventing losses, we can set off on a journey of collecting them here and there
And finally, we can choose a completely different, even somewhat antagonistic approach by taking the route of cost-averaging. Basically, we can continuously add up to a losing position but since this can be seen as an extension of the first approach, instead of making our position better, we may actually end up with a worse one (like when we started to average down from the ATH of 20k)
As you can see, not a single one of these three possible ways of trading in a downtrend market can guarantee anything
