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Hi Jim,

Well done on being honest. I think as you say many people do have trouble acting on stops.

I would like to tell you there is a nice simple way but I think for many people it takes losing money. It did for me anyway. This is because of our beliefs.

I noticed in your post you wrote 
"the companies are fundamentally sound with good prospects...the price decline defies common sense (this is a common thought)"

I am assuming these are your thought processes. Thought processes are generally underpinned by our beliefs. I have no trouble acting on stop losses becasue I have lost money in the past not doing it. My belief is that working on fundamentals and common sense loses me money while acting on stops helps make me money. Your belief however may be that the fundamental opinion of a company is meaningful and that price will come back.

I am not saying you are wrong and the others are right. Every body has a different way of trading. Many fundamental analysts have no time for technical views - if they make it work that is fine.

I believe using technical analysis is a numbers game. Minimise losses and put the balance of probability on your side. In order to do this stops are generally needed.

Changing beliefs for the most part (I think) comes from our experiences. For example I love dogs but if I got mawled tommorrow by a pit bull I may be less caring next time I see one runnning across the road...

Maybe this answer is not what you are looking for but while ever someone is trying to adhere to another person's belief when it doesn't seem right to them, there will always be trouble maintaining discipline.

The only suggestion I can make is extensive research on your approach. Seeing factual results can be hard to deny especially when there is a repeated pattern that becomes visible. This could be done through back testing but this is more difficult with fundamental and technical combined.

Hope this helps in some small way. I admire your honesty.

Good luck, I hope all continues to go well for you...

Jason

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