Not a bad way to approach this. Way safer than trying to buy a falling knife. 50% loss takes 100% gain to make back, 80% needs 400% gain. 90% loss takes 900%. Avoiding big losses is key to staying profitable.
I am a bounce player at heart so I trade this kind of garbage a lot. When volume is 3-4x amount needed to be raised(at discount price) its usually getting close. At that point big volume blowout day is a sign to start nibbling and add on confirmation. But as with any trade need to have an exit strategy if stock is not doing what is expected. Shouldn't be adding to a trade unless its a winner. Averaging down is a recipe for disaster.
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