There are lot of guys that get lucky at the casino, it's not because they are right. Sooner or later, that "buy on every dip" mentality will lead you to the poor house. No matter how much money you have behind you. Refusing to admit you are wrong when the market repeatedly says you are is a mistake. No trader in their right mind should ever take that kind of heat. Market always comes back. But shit man, with that reasoning every trader is a genius. Look at everyone trying to short the rally. Eventually they will be right. But for God's sake, when you are wrong, you are wrong. The idea behind trading is to make the kinds of gains WITHOUT taking that kind of risk. Anyone can dollar cost average a stock or a commodity until it moves their way. Many did that in the late 90's with tech stocks until they blew out in 2000. How many blew out buying Crude oil futures all the way down citing strong underlying fundamentals that it should go higher. How many have been shorting index markets citing a very weak economy, war, interest rates, blah, blah, blah. Where has that gotten them?
Refusing to admit you are wrong and just doubling up every tick against you until you are proven right. This is why guys blow out. Fundamentals are great when the trades work out for you. But they are tragic when they don't. Think of all the bears shorting tech stocks too early in 1998 and 1999. In the end you may be proven right, but over the short term, you could lose everything. Hence the famous quote, "the market can remain irrational longer then you can remain solvent." Many traders make a great living trading with no edge. And just because you have an edge does not mean you will ever make a dime. If it's working, keep doing it. There is no edge in trading off of something that everyone has access unless there is a lot of ambiguity involved, which usually there isn't with stock fundamentals. Pretty straightforward.
Let's say you bought a stock from $8 all the way down to $2. And on the way down, the fundamentals were all intact. Everything looked great. No reason not to buy. But let's say by the time it got down to $2, suddenly some information was revealed that showed that this thing was a dog and the fundamentals have drastically changed and there was no reason to hold it. What would you do? See, you can buy a stock with faith in the good fundamentals, but you are making the assumption that the fundamentals are going to stay strong in the future. Now, that is normally not a big deal as most people would bail on a stock after a 5% or 10% loss and maybe re-enter the stock later. But if you are going to take 50% to 75% hits on a stock, this is definitely a concern. A good trader could have looked at that stock and the fundamentals and said, OK, fundamentals look great, technicals look awful. Stock is making lower lows every day. I'm going to wait for this stock to bottom and show some signs of strength, and then I'll start buying it if the fundamentals are still good. They would not just jump in and try to catch a falling knife. There is never a good reason to let a position go that much against you, no matter how much money you have.