Averaging article
I found this information useful and wanted to share it. Lately I have been the avg down (dummy), I guess you would say, but I will say it has been working for me as of late. After reading this article it has me thinking a bit differently for sure. I have plenty of stocks I could average up in, instead of trying to find the next stock that will make a run.
Let me know what you think.
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Field of Greens : I like this article. It's something I've heard multiple times. But still struggle to keep from doing it on a current position. So frustrating I sold my 10 shares of PLUG to buy a position in a cryometric freezer company. Since PLUG has doubled. I actually did average down a little once for a few shares. My average cost is just over 2dollars and it has been hanging around the 40 cent level. I keep wanting to average down because I do still believe in the company but I'm already down around 280 dollars. I have too keep telling myself your already down enough don't do it. If you counted the rise of PLUG it's closer to 600. This has been probably my worst move of my trading career. But by averaging down I could continue to add to the losses instead of accepting it and hoping I was right about the company.
KINGKILG : absolutely. i see exactly what its saying. why keep filling a car with gas that doesnt have a gas tank??
FOX0 KINGKILG: So it runs on the fumes it has?
KINGKILG FOX0: exactly. barreling more money into an already sinking ship just pushes u down more rapidly.
FOX0 KINGKILG: Or somehow gets you to your destination as oppose to being stranded right?
FOX0 KINGKILG: My MO is- if I think something is about to go up- in the next day Ro 8,usually -it is. Sometimes it goes down some first, so I buy a little to Max my return on the way up. If it keeps going down, I can keep buying in until I break it even at the least. I don’t like negative numbers. Sometimes they are helpful though; mVIS is a company that lost 25% but has about 500%updated so when it dropped 25% I felt comfortable buying some cheap shares and lowering my average.
I have more losses due to buying peaks than buying dips that’s for sure.
FearGreed : Let me sum it up: get in on the pump, get off on the dump!
KINGKILG : exactly
BabyRatchet : Great article! Thank you for the info my dudes!