Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Gut Trader who wrote (174470)	6/22/2002 6:47:32 AM
From: clochard	Respond to of 436258

Averaging down is very effective if done properly. If you buy a good stock in equal lots at equal increments on the way down and sell on the way up, your average price goes down because you are always selling higher than you are buying. If you don't buy too much too soon you will be able to stay afloat. And if the stock doesn't fall out of bed (a GOOD stock won't) your average price will fall to a level so low that you could reap a big profit in a rally. Calculating the average price of your holding is not trivial and should be mastered before attempting this method.