Hi Guys

[Redwing]

Hi to everyone on the forum ;D

Looks great and v.e.r.y interesting..
I've always been a buy and hold, or set and forget investor when it comes to shares and on the occasions when I have bought and sold, I've done well, if a share I was happy with dropped in value, I bought more and 'averaged' out the price, and eventually sold making a profit. However, as I'm starting to learn more and more about shares, charts and the various ways to trade, my eyes are opening to other options.

I'll be dropping in every now and again..dividing my time between www.propertyinvesting.com and here.

The information on various ways to trade and view shares is Mindblowing.

I still have my comsec account, however, on Still in Schools advice i'll be looking at e-trade.

I heard marketmad is not takimg on any 'new' customers?

Any tips for a "newbie" guys ?

REDWING

 

[Joe Blow]

Re: Hi Guy's

Welcome to the forum, Redwing!

We have a great bunch of posters here... I'm sure you'll learn a lot and have a lot of fun here.

Cheers!

;D

 

[JetDollars]

Re: Hi Guy's

I've always been a buy and hold, or set and forget investor when it comes to shares and on the occasions when I have bought and sold, I've done well, if a share I was happy with dropped in value, I bought more and 'averaged' out the price.

Pyramiding down is not the way to go, that is what I had read and learn so far.

In long term pyramiding up is the way you should do it.

Back in 99/00 I did a lot o pyramid down and yes I made and loss money by doing so, but the end result was not the way I want it.

Eg. I bought LibertyOne at $0.29 sold it at $0.36, bought it again when it go down to $0.25 sold it at $0.29. Bought it again at $0.25, $0.18, $0.15, $0.12 and from there on it never recover....

 

[profithunter]

Re: Hi Guy's

Don't you hate when you fall inlove with a stock.

 

[ghotib]

Re: Hi Guy's

I'm confused. Would "pyramiding down" be the same as "dollar cost averaging" if you never sold?

Thanks

Ghoti

 

[still_in_school]

Re: Hi Guy's

dam...

I wrote such a long reply, on reason not to average down...

Anyway... ill try to explain the best reason why not too...

The problems with pyramiding down is, your averaging down your positions, but your adding to a losing position, the problems with pyramiding down, is that your position is already running at a loss, but your adding to a losing streak, which is going to further cost you more in your winning profits, but add more greater risk, because you have more money in a losing position... (other associated costs are, the extra and further more brokerage + conditional ordering) the only time you would average down, is if the the stock is already in a uptrend, but a reversal, which is a sign of a real bullish movement, is occurring...

The best option is to always average up, its the opposite to averaging down, but your adding more winning positions, and more accelerated profits, and share holdings, are at a lesser risk, if the stock was to go down, due to breaking out even or still walking away with little profit.

Cheers,
sis

 

[Redwing]

Re: Hi Guy's

Thanks Still in School and Jet$

And I thought I was doing well, thinking I chose well when the stock later recovered and I sold at a profit..

So averaging "up" is the better way to go... then sell before it drops again I guess, is that the methodology behind averaging up?

REDWING

 

[stefan]

Re: Hi Guy's

And I thought I was doing well, thinking I chose well when the stock later recovered and I sold at a profit.

You did indeed well. That's the whole purpose in buying more while the stock goes down. The question is why you are buying when it is moving down. If the stock is moving down because the market is in a bad mood but the company has not changed, then you are doing the right thing. If you are buying on a down trend after the company announced bad news, then you are in for a risky shot or a very long hold...

The best option is to always average up, its the opposite to averaging down, but your adding more winning positions, and more accelerated profits

Sis, Jet, I would say there's no such thing as a "best option". This idea is just as much wishful thinking as anything else that starts with "the best option...". Conditions for the stockmarket are changing constantly and so is "the best option".

Happy trading

Stefan

 

[JetDollars]

Re: Hi Guy's

Don't you hate when you fall inlove with a stock.

ProfitHunter,
I know exactly what you meant. The temptation of buying more stock when it is heading south is hard to resist.

If the stock is moving down because the market is in a bad mood but the company has not changed, then you are doing the right thing. If you are buying on a down trend after the company announced bad news, then you are in for a risky shot or a very long hold.

Stefan,
I strongely agreed with your statement, but that is depend on trading plan. If you are a short term trader then I think it's better to get out when it start trending down and enter again with it start trending up.

But if you are a long term investor and you know the company has not changed then I guess it's probably wide to add more shares to your position.

 

[Redwing]

Re: Hi Guy's

One of my better buys was Coke Cola around 3.60 or so when they were having problems in the Phillipines, i just knew they'd "bounce back"..

REDWING