posted
I'm wondering how many here average down when they are in a dropping stock to try and save their loses?
For instance let's say you buy in a .0015 for a million shares.
Then the stock takes a big tumble down too lets say .0007 or .0008 range.
Do you then buy another million or two at the .0007 or .0008 range if it's holding stable at that price?
This way you can sell in the .001 .0011 range and cover your loses and still take a small profit. This is of course assuming the the stock price will go back up but maybe not as high as you bought it at.
Typically I cut my loses and either buy back more at the low or I move to another stock. I'm just wondering how many play that kind of game?
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crockett has it right... if it goes down after you buy it cut your losses and go elsewhere or buy back in when the price settles... Even buying back in at a higher price is prefferable to watching it drop to zero. Alot of this game is waiting for confirmation of trends.
-------------------- Spend Word For Word With Me And I Shall Make Your Wit Bankrupt.
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posted
Generally I hear it's not a great idea. From my own experience, it hasn't really worked for me. But really, I guess it all depends on the stock and how sure you are that it'll bounce back.
Of course, look how many people averaged down on Enron. Ouch.
-------------------- Life is like a roll of toilet paper. The closer it gets to the end, the faster it goes.
posted
I personally stay away from it. I will sell at a lose befor i sit around watch it drop and buy more along the way. honestly i lost big time on doing that on CWFG. i could have made a couple grand on cwfg, but noooo I had to be retarded little kid that acually belived in a company. LOL ever since i cut my loses and possibly buy back. i am perfecting how and when to cut losses, thats the hard part. I have sold a few this month right as they run. VCTY (bought at 17 she ran to 60 over the next couple days.. lol there were 1 or two others. But it has also saved my butt from ridding a couple down into the ground also. So its almost like an art, not a science when it comes to cutting losses.
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posted
Averaging down is the worst mistake anyone could ever do. The best way to make money if you really like a stock going down in price is sell and buyback when it hits bottom. Your worst case this way if it continues down is you lose less then if you held all the way to the bottom. Averaging down is the best way to lose most of your money.
Sell a falling stock
Buy a rising stock
Thats the only two rules you need to memorize. It doesn't matter how much you like a stock set a stop limit and sell. You can always buy back. Warren Buffett stated not setting a stop limit is a sure way of losing all your money.
What gets me is someone complaining that shorting or MM's are bringing down a stock price. Whether you believe that or not why are you holding a falling stock. It doesn't matter why it is falling be it the company's fault or external reasons. Sell a falling stock. You can't blame no one but yourself for holding onto a stock dropping no matter what the reason. If it starts back up buy it back.
Always take profit whenever possible because holding real profit to long will cause you to lose at some point. If it does go up who cares the next one will burn you. For every one you could of made a little more on the next 10 will cause you to lose everything holding it too long.
-------------------- Invest with your brain not with your heart.
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posted
I agree with you all for the most part, however averaging down is NOT ALWAYS BAD...It all depends on the stock really..With QBID or ICMH for example that may be bad. If the stocks has billions of shares or the L2s look bad, dont do it. If you look at the history and see patterns and feel farily confident that the company is not diluting, its not bad. JMO though
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posted
What and Ric and others are trying to impart is a rule-of-thumb for most (penny)stocks--not the particular picks in your personal history. In that sense, in the "universe" of possible plays, yes--it's a bad idea.
Where some get confused--I believe--is when experienced traders buy on dips during an overall larger run. That's done because they know the pattern, know the stock, etc... and are simply adding to a position... This may be what you're talking about.
But as Ric says, when it starts going south--exit, scram, head for the door...you've already got your sell-order in place, right? Especially if your broker doesn't allow stop-limits...
-------------------- Nashoba Holba Chepulechi Adventures in microcapitalism...
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quote:Originally posted by Ric: Averaging down is the worst mistake anyone could ever do. The best way to make money if you really like a stock going down in price is sell and buyback when it hits bottom. Your worst case this way if it continues down is you lose less then if you held all the way to the bottom. Averaging down is the best way to lose most of your money.
Sell a falling stock
Buy a rising stock
Thats the only two rules you need to memorize. It doesn't matter how much you like a stock set a stop limit and sell. You can always buy back. Warren Buffett stated not setting a stop limit is a sure way of losing all your money.
What gets me is someone complaining that shorting or MM's are bringing down a stock price. Whether you believe that or not why are you holding a falling stock. It doesn't matter why it is falling be it the company's fault or external reasons. Sell a falling stock. You can't blame no one but yourself for holding onto a stock dropping no matter what the reason. If it starts back up buy it back.
Always take profit whenever possible because holding real profit to long will cause you to lose at some point. If it does go up who cares the next one will burn you. For every one you could of made a little more on the next 10 will cause you to lose everything holding it too long.
What he says is true and a very good tip. Might I add when in a falling stock notice trends in the stock. Sommetimes you might get a 20-30% pullback on a shake and if you sell for that lost you will feel stupid once the stock pulls back after the shake. The best time to get into a stock is when she is pulling back. Chances are you would of missed it in the beginning but always know if a stock pull back atleast 20-30% she will go right back up to the selling point. Sometimes it's better to get in when she is running sell when the first batch of selling comes in, then get back in when she pulls back. Once again it's for those who daytrade and know the signs of a MM shake or a DUMP..
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quote:Originally posted by BuyTex: no, you might *not* add...
pure, unadulterated drivel...
quote:...but always know if a stock pull back atleast 20-30% she will go right back up to the selling point.
lol, I can't believe you've held on to this nick so long...
Maybe because I am not who you think I am. Anytime someone new comes onto a board all the senior posters get so defensive. I am just trying to share my intel being I have more knowledge then say..... DQ what ever his name is. Trsut trying to help..
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quote:Originally posted by BuyTex: no, you might *not* add...
pure, unadulterated drivel...
quote:...but always know if a stock pull back atleast 20-30% she will go right back up to the selling point.
lol, I can't believe you've held on to this nick so long...
Maybe because I am not who you think I am. Anytime someone new comes onto a board all the senior posters get so defensive. I am just trying to share my intel being I have more knowledge then say..... DQ what ever his name is. Trsut trying to help..
Pittyfull , I would agree with all you said except for the part where you say all selloffs are followed by a sharp increase. This is obviously not true. Also making the inference that you are more knowledgable than I is... well... Just silly. Momo has filled your tiny little cranium with lies. Stocks don't always rebound and staying in anything that is dropping is unwise. Save profit. That is one of many keys to smart trading.
-------------------- Spend Word For Word With Me And I Shall Make Your Wit Bankrupt.
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posted
I had a stock which I averaged down for 5 years and finally one day it started upticking like crazy. I even made 4 grand. lol Averaging down is a good thing.
quote:Originally posted by BuyTex: no, you might *not* add...
pure, unadulterated drivel...
quote:...but always know if a stock pull back atleast 20-30% she will go right back up to the selling point.
lol, I can't believe you've held on to this nick so long...
Maybe because I am not who you think I am. Anytime someone new comes onto a board all the senior posters get so defensive. I am just trying to share my intel being I have more knowledge then say..... DQ what ever his name is. Trsut trying to help..
Pittyfull , I would agree with all you said except for the part where you say all selloffs are followed by a sharp increase. This is obviously not true. Also making the inference that you are more knowledgable than I is... well... Just silly. Momo has filled your tiny little cranium with lies. Stocks don't always rebound and staying in anything that is dropping is unwise. Save profit. That is one of many keys to smart trading.
So explain to us. You seem to have all the answers. So lets see your method. What's the difference between a shake and dump? Not all stocks bounce (group plays) stock that do bounce (swing trading) you will always have a pull back on a chart and then a reclimb. That's why you see the spikes on the chart. Just give it up trying to second quess me. I know more then you simple then that. Not my fault you were sleeping when I was trying to teach you how dilution works..
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posted
No you do not always have a reclimb... So by your rational (and I use that word lightly) You would still be holding QBID, PLNI, or the million other POS stocks that will never rise again?
-------------------- Spend Word For Word With Me And I Shall Make Your Wit Bankrupt.
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quote:Originally posted by JoeMillion: I had a stock which I averaged down for 5 years and finally one day it started upticking like crazy. I even made 4 grand. lol Averaging down is a good thing.
Joe
absolutely nothing wrong with that...if you have the dough and the patience...good call.
It's way against the norm, but, hey--good for you, bro...
Most of the scamsters that invade here? That's the *not* the play they're after, lol...
-------------------- Nashoba Holba Chepulechi Adventures in microcapitalism...
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quote:Originally posted by BuyTex: no, you might *not* add...
pure, unadulterated drivel...
quote:...but always know if a stock pull back atleast 20-30% she will go right back up to the selling point.
lol, I can't believe you've held on to this nick so long...
Maybe because I am not who you think I am. Anytime someone new comes onto a board all the senior posters get so defensive. I am just trying to share my intel being I have more knowledge then say..... DQ what ever his name is. Trsut trying to help..
Regardless of who anyone thinks you are, lol--you post misleading information...
-------------------- Nashoba Holba Chepulechi Adventures in microcapitalism...
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posted
I'm living proof... NEVER AVERAGE DOWN!!! Cut your losses and move on...
One Example: I averaged down with BLYC... From a start of .06 all the way down to .015... it's now trading on the pinks at .0003 and on the verge of total collapse... IMO... I lost Thousands on this one...
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posted
GZFX killed me last year. Made a killing on it to begin with and bought back in at .10 and averaged down to it cut me bad. Finally sold at .03. I guess if I continued to hold It would be back to were it was now but thats a years worth of trading with that money. And if I would have sold and bought back at bottom would have made a killing on it now. Just think if you sold high and bought back on low how much more you would have made on it then if you didn't average down. You almost always make more sell a dropping stock and buying back when it starts moving up again then averaging down.
Now if the IRS could figure out how to do math or learn to read a 1099 I would be alright. Got a letter in the mail yesterday stating that I under reported capital gains last year. They want me to pay taxes on $70,000.00. The morons got my 1099 but for some reason only the sells report. Yes I sold $70,000 dollars worth last year but It cost me a little over $50,000 to buy it. I only made a little over 19K not 70. I wish that I made $70K on swing trading pennies last year.
-------------------- Invest with your brain not with your heart.
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posted
I got lucky on AFRR, I sold it to put more money into the first PHGI (GZFX) run. I remember how it was pumped on the board and how many lost big time on that pump. A week later it did its r/s wht was it Jan. 2004. Probably the only lucky move I have made, lol. But talked my boss into buying some. Glad I don't work for him anymore. LOL
-------------------- Invest with your brain not with your heart.
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posted
I got this off of another forum. I forgot to get the posters name but its not mine. I read this every couple days just to reenforce it into my brain!
quote:Roller Coaster! ________________________________________ I am no expert but I will say this. When you decide to invest in stock, you can't look at it in terms of dollars spent, but rather shares held. I will leave the following numbers to illustrate...
Two Investors. Same # of shares. Same dollars into the company.
1000 shares * $1.00/share = $1000.00
Investor I 1000 shares and holds until the stock reaches the target price the 'experts' project the stock to reach * $2.00/share.
Investor II 1000 shares and watches the stock take a downward drop and looks like it is going to drop more. Sells * $.90/share.
Gets $900.00
The stock drops to $.85/share. Buys 1058 shares for $900. Notice, Investor II now has 58 more shares than at first)
Oops! The stock drops more. Investor sells 1058 shares * $.80/share. Gets $846
The stock drops to $.75/share. Buys 1128 shares for $840
Oops! The stock drops more. Investor sells 1128 shares * $.70/share. Gets $789
The stock drops to $.65/share. Buys 1213 shares $789.
Oops! The stock drops more. Investor sells 1213 shares * $.60/share. Gets $727
The stock drops to $.50/share. Investor buys 1454 shares for $727.
Now, let’s see the difference.
Investor I held 1000 shares and is now 'down' $500.00. Investor II bought and sold the whole way, and is now down $273.00 AND owns 454 more shares than Investor I.
Here is the real beauty. Investor II will break even once the share price reaches $.69/share. Investor I has to wait until the stock reaches $1.00 again. This means, Investor II can sell shares at a PROFIT long before Investor I ever breaks even!
Plus... once the stock reaches its target, Investor II reaps $2,908.00 while Investor I reaps only $2,000.00. This is nearly TWICE as much profit.
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