Message to the LONGS---
---you do not average down---EVER!!!!!
And you do not establish a long position in a down trending stock!!
Let's say ,,you purchase at 24 or 46 or 1.75 and it goes down--at least 10 percent---you GET OUT! why?? you may have the right vehicle , but the timing is wrong..
When it bottoms out ---then you can re-establish--and avg up...
Read Bernard Baruch's book on investing---he was a BIG LOSER for the first 8 years of his investing life on Wall Street---
He owned all losers b/c he was averaging down----He did not have a profitable stock in his portfolio---WHY???
Because when it went up , he sold and took his profits---and then had to re-invest the proceeds---
When it did nothing he held on----waiting for it to go up---so he could sell it-----
When it went down he held it---and when it went down further he hung on and rationalized and sometimes he added as it went down..then when it went up and he was even he sold it---
He realized every time he sold and had cash to re-invest,, 3 things could happen---it could go up,, or go down,, or stay the same-- One of three things could happen and two were bad---
So, he changed---sold all of his losers or bad decisions and kept his winners,,, following along with a trailing stop loss order---not a stop limit---the straight stop loss order turns into a mkt order when the target price is hit --bingo and you are out.
A few years later , following this philosophy,, he was a multi million dollar success.....and book writer on investing.
I built a position here with several purchases in the 40 cent to 50 cent area going up and sold it all as it came down from its high--the last of my position was sold at 88 cents ---I am not yet back in---but I will be. .... it's all a timing thing---and a timing signal would be news,, followed by volume,,, caused by hits on the ask side---
cheers
