This brings up an interesting question that's been on my mind since that graph was posted. If the market turned over and headed down, ultimately giving up half its value, when would you know it? If you were fully invested at the time and were watching the daily wiggles, how would you finally decide that it was more than just "oversold" or "due for a bounce" or whatever. When would you cut your losses? Seasoned players use stops and force themselves to observe them, but if everything really looked oversold, wouldn't the temptation to stay just a little longer be awfully intense?
This is where you tell the smart money from the dumb. The herd will ride it all the way down. I've never been through a real collapse so I don't know what I would do on my own. Thanks to this board, I'll have the advice of dozens of people who know the markets far better than I.
