This only holds true if you are the sucker in the trade.  My rule of thumb is the big names are big names for a reason.  So:

• Don’t trade Ortiz just because he is in a 10 game slump.  He has finished in the top 10 fantasy players 2 seasons in a row.
• Trade Corey Patterson if you can get value for him.  He gets hurt nearly every year and has not been fantasy relevant in the past 3 seasons.

It doesn’t matter if you make the trade in week 1 or week 20.  Just don’t be the sucker.  I agree that early waiver moves can be harmful when you start dealing your early picks and starters to the waivers.  Try and maneuver your bench around to get hot players to substitute for slumping players that consistently, over a full season, produce good fantasy numbers.

I would argue that, barring injuries, the preseason projections you had for a player are still more relevant than their current production.  When is the cutoff?  I don’t know exactly.  I’ll throw out 80 at bats as an arbitrary signal to start worrying about one of your top 5 picks.