couldn't resist aka:"It also conditions you to lose money and...

couldn't resist aka:

"It also conditions you to lose money and average down and throw good money after bad trying to catch a falling knife
2 years ago Jan 2011 PLV hit $1.34"

I averaged down plenty of times during the GFC: a downtrend that lasted quite some time. If you're smart about the way that you average down, you don't run out of money, you end up with a good average price and make a packet on the way back up. This requires discipline and sticking to a well defined buy strategy.

Let's take MGX as an example from my own book. Think I originally paid around the $2 mark, averaged down a few times over the big crash, my average price in the end was just below 40c. Sold them for about $2 a year or so ago. Made a tidy profit, no chart required. Maybe I could have done better with T/A but I'm pretty comfortable just having balls of steel (that's for you mtl999) and a long-term view and picking stocks based on fundamentals ;-)