Averaging down experience

I wish

Trav. said:

Thanks for all the responses.

Example of my latest average down experience. No rhyme or reason just chasing my money. Event that started the down trend was a delay with the PFS. Got sucked in to buy on the expectation of news. Now stuck in a holding pattern until PFS is released later in the year.

Trades & Chart
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You bought in on the up, so its like your entering as a trend follower then instead of selling out you try and average down and catch bottom without waiting for a bottom, it all looks very random.

A trader can play the market this way but it is futile. Time waiting to get back above water and the potential to never get back above water are the main deterrent for savvy traders.

I do not look at my decisions as "averaging down" or "averaging up" per se as I consider each decision is independent of the last.

I may buy a stock and then six months later I may buy more at a higher price because I have fresh cash to invest and the shares are good value.

I may also buy shares and then 4 months later buy more shares at a lower price because the shares are undervalued and I have cash to invest.

Sometimes I buy more shares at a higher price and other times I buy more shares at a lower price.

The fact that the share price has risen or fallen since my previous purchase has almost no bearing in and of itself on my decisions its the price to value relationship and the fundamentals (and my personal balance sheet position) that determine if I buy, sell or hold shares.