I'll give you a better example, hard to explain via text. For...

I'll give you a better example, hard to explain via text.

For eg: AYS is $3.10. If you "average down" at $2.50, $2, then $1.50 you are instantly losing money on those purchases while the stock is still plummeting.

What I do, not advice either, is wait for the stock to steady, form a base then only buy an uptrend. Only buy a stock that is going up, after all the "trend is your friend"- A saying that's been around decades. Hope this makes sense.