Back on the theme of yesterday, where it paid to have averaged down, I refer you back to a previous “Trade of The Week” on Trinity Mirror where it also paid to have averaged down. And I’ve referred you back to that prior trade on Trinity Mirror because it sets the scene for what I […]
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Trade of the Week on Trinity Mirror
By Tony on November 13, 2012 in capital spreads, intertrader, position trading, pyramiding, stop orders, trinity mirror
Way back on 16 August I used my position(s) in Trinity Mirror to demonstrate How to Average Down (Safely). In this week’s “Trade of the Week” feature I thought I’d update you on how the averaged-down position(s) played out, and to tell you what I’m up to now with the Trinity Mirror. Well, here’s what […]
Trade of The Week: Sometimes It Pays to Average Down!
Most seasoned spread bettors and other traders will tell you that it is usually a bad idea to “average down” by adding more funds to a losing position, despite the obvious temptation to lower your overall purchase cost and therefore to break-even much sooner. I said as much in my Position Trading book. Then I […]
An Example of How to Average Down (Safely)
One of the golden rules of trading and investment is to never average down, despite the fact that logically this should lower your average purchase price thereby enabling you to break-even much sooner. As I see it, the problems with “averaging down” are twofold: 1) If you’re not careful, averaging down on your falling stock […]