http://www.thestockbandit.net/2005/12/15/averaging-down/ Trading blog with trading insights, discussion on swing trading, day trading, and trading psychology. Sun, 20 Jul 2008 13:43:21 +0000 http://wordpress.org/?v=2.0.9 http://www.thestockbandit.net/2005/12/15/averaging-down/#comment-1282 Fri, 28 Jul 2006 14:51:53 +0000 http://www.thestockbandit.net/2005/12/15/averaging-down/#comment-1282 [...] If you’re adding on trading size because you’re on the wrong side of a trade, you’re trading too big. Why add fuel to the fire when you’re wrong? Compounding one mistake with another will often lead to even worse performance, so focus on working your way out of the first bad trade without adding to it. There’s only one time when it’s OK to average down, and it isn’t when you suddenly realize you’re wrong. [...] […] If you’re adding on trading size because you’re on the wrong side of a trade, you’re trading too big. Why add fuel to the fire when you’re wrong? Compounding one mistake with another will often lead to even worse performance, so focus on working your way out of the first bad trade without adding to it. There’s only one time when it’s OK to average down, and it isn’t when you suddenly realize you’re wrong. […]

]]> http://www.thestockbandit.net/2005/12/15/averaging-down/#comment-1257 Tue, 25 Jul 2006 16:19:19 +0000 http://www.thestockbandit.net/2005/12/15/averaging-down/#comment-1257 [...] What I would do was establish small pilot positions in stocks on reaction bounces anticipating a move back down once the bounce was sold. If my entry timing was poor, it didn’t matter a lot because I was only in a partial position. Depending on the stock, I’d either add the remaining shares up to my intended size (average down the good way), or cut the trade entirely and look for a better spot to re-enter. [...] […] What I would do was establish small pilot positions in stocks on reaction bounces anticipating a move back down once the bounce was sold. If my entry timing was poor, it didn’t matter a lot because I was only in a partial position. Depending on the stock, I’d either add the remaining shares up to my intended size (average down the good way), or cut the trade entirely and look for a better spot to re-enter. […]

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