Averaging down is not a good strategy.Buy low, sell high, if a...

Averaging down is not a good strategy.

Buy low, sell high, if a stock is trending down, you are not going to be selling higher, unless the stock rebounds.

There are 2,000 stocks on ASX bourse, why put money in a stock trending down? Unless you have inside information and know the stock will go up.

Wait till it is going up, then average up. Then, when your original parcel has doubled in price, sell it and be free carried. Go and find another stock and do the same.

Why is the price of a stock trending down?

A bluechip example is QBE, a darling of Roger Montgomery's. He had been recommending it above $20. I did buy some, then was stopped out less 15%. Stock is now at about $11.00. If it recovers and startes trending up, I may buy back in. But I didn't average down.

On the speccie side, we do see posters bragging about backing the truck up, buying as the stock goes down, but once again, why buy on the way down? Much better plan to buy on the way up. I suspect that it is posters trying to manipulate newbs that keep suggesting buying as the price sinks.

Build a trading plan to make money, and buying a stock going down won't make money.