Averaging down? sellng at lost?
When some asked, can average down? My reply to them is I discourage averaging down as we do not know how low is low and that's my only reason.
What if, I cut my lost when I was wrong about the price and buy back the same number of shares at a lower price, is this another way of averaging down... I asked myself. I don't know you judge for yourself using the example below:
Buy ABC 10 lots @ 0.945 = $9482.99
Sell 10 lots @ 0.760 = $7573.47
Realised Profit and lost = -$1909.53
Buy back 10 lots @0.750 = $7526.81
Diff. +/- from buy back = $47.28
Net loss = -$1862.25
Aveage unit cost/share = $0.85049
I may need to sell when price is up slightly and buy again when it's down to further average down. The question is; It's worth the trouble? What if immediately after my selling the price start to move? That's the risk!
Kind of funny right? why not cut lost, instead of having a funny way of averaging down. Let 's put it this way it present a way for mistake correction, and for trade with a long term view.
As to cut lost - it is more for a new trade for day trading or contra.
For some, may be I speak for myself, I may not be willing to sell my lost making stock. The above present another alternative for me to recoup my losses. Frankly, once a loss making stock is sold, chances of buying it back is rather slim. I know, because I tried it; buying and selling within a price range, I stop after one round. Reason: It is a long process ....
Each to your own decision.
Happy averaging
What if, I cut my lost when I was wrong about the price and buy back the same number of shares at a lower price, is this another way of averaging down... I asked myself. I don't know you judge for yourself using the example below:
Buy ABC 10 lots @ 0.945 = $9482.99
Sell 10 lots @ 0.760 = $7573.47
Realised Profit and lost = -$1909.53
Buy back 10 lots @0.750 = $7526.81
Diff. +/- from buy back = $47.28
Net loss = -$1862.25
Aveage unit cost/share = $0.85049
I may need to sell when price is up slightly and buy again when it's down to further average down. The question is; It's worth the trouble? What if immediately after my selling the price start to move? That's the risk!
Kind of funny right? why not cut lost, instead of having a funny way of averaging down. Let 's put it this way it present a way for mistake correction, and for trade with a long term view.
As to cut lost - it is more for a new trade for day trading or contra.
For some, may be I speak for myself, I may not be willing to sell my lost making stock. The above present another alternative for me to recoup my losses. Frankly, once a loss making stock is sold, chances of buying it back is rather slim. I know, because I tried it; buying and selling within a price range, I stop after one round. Reason: It is a long process ....
Each to your own decision.
Happy averaging

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