The next chart shows the same stock at the close of trading today:
Notice how the stock closed down 70% today in what was one of the most dramatic one day moves I've seen in a while.
In my opinion, this emphasizes the point that, when it comes to the stock market, anything can happen.
I think it also stresses the importance of using hard stops. Even if a trader had bought this stock yesterday, he would not have had to take a 70% loss today if a proper stop would have been in place.
I examined the 1 minute chart, and it was not as though the stock plummeted 70% instantaneously. Rather, the stock crashed 70% mostly during the first few hours of trading, allowing stops to get hit.
Finally, I think it shows that "mental stops" can be a bad idea. This morning, this stock was crashing 10% every couple minutes, and anybody using mental stops would not have been able to react as quickly as a hard stop would have. In this case, a few seconds could have been very costly.
