Leon - I'd disagree vehemently with that strategy.
Why buy stocks all the way down, averaging down, so you end up with more and more of a stock which is worth less and less? And the turnaround then needs to break back up ABOVE your averaged-down price just to break even?
Far better to buy more parcels on the way UP a trend, averaging up. That way, you end up with more and more of a stock which is worth more and more, amplifying your gains. When that trend turns around, THEN you sell, having been in profit all the time.
Makes much more sense to me.
And you can average up into a stock (known as pyramiding up into it) by EITHER buying equidollar amounts each time (i.e. less shares but more cost per share), OR buying the same number of shares each time (more cost each parcel).
Either way, as long as you know how to run a trailing stoploss, then you will find it difficult to lose money, as long as the trend is UP.
Averaging DOWN = BAD idea
Averaging UP = GOOD idea.
But - each to their own I suppose.....
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