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    t part the problem with averaging down is that people use it to justify a poor trade. If you buy into XYZ with the idea it is going up and it starts to fall
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    We don't consider playing defensively a way of buying "safe" stocks because safe stocks won't make you any money. We need movement, but there are ways to help you survive huge mood swings that the momentum stocks can display. Today we are going to look at the idea of "averaging down" and if it is a good idea or not. It is not an easy answer.

    The concept behind averaging down is that if you buy XYZ at 100 and it falls to 90 and you buy more, your "average" cost is just 95 now. So if XYZ bounces up, you only need to get to 95 to break even on the trade. The idea sounds reasonable, right? Well, "maybe/sometimes".

    For the most part the problem with averaging down is that people use it to justify a poor trade. If you buy into XYZ with the idea it is going up and it starts to fall,

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    u survive huge mood swings that the momentum stocks can display. Today we are going to look at the idea of "averaging down" and if it is a good idea or not. It is not an easy answer.

    The concept behind averaging down is that if you buy XYZ at 100 and it falls to 90 and you buy more, your "average" cost is just 95 now. So if XYZ bounces up, you only need to get to 95 to break even on the trade. The idea sounds reasonable, right? Well, "maybe/sometimes".

    For the most part the problem with averaging down is that people use it to justify a poor trade. If you buy into XYZ with the idea it is going up and it starts to fall

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    s not an easy answer.

    The concept behind averaging down is that if you buy XYZ at 100 and it falls to 90 and you buy more, your "average" cost is just 95 now. So if XYZ bounces up, you only need to get to 95 to break even on the trade. The idea sounds reasonable, right? Well, "maybe/sometimes".

    For the most part the problem with averaging down is that people use it to justify a poor trade. If you buy into XYZ with the idea it is going up and it starts to fall

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    now. So if XYZ bounces up, you only need to get to 95 to break even on the trade. The idea sounds reasonable, right? Well, "maybe/sometimes".

    For the most part the problem with averaging down is that people use it to justify a poor trade. If you buy into XYZ with the idea it is going up and it starts to fall

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    t part the problem with averaging down is that people use it to justify a poor trade. If you buy into XYZ with the idea it is going up and it starts to fall, you have to ask why? If the market is healthy, and XYZ hasn't released any bad news, XYZ should be at least holding its own right? Well someone doesn't like it and you don't know the reason why, yet. Now, suppose you buy more XYZ to "average down" and then the next day "boom" they release some type of bad news. You have effectively bought more shares of a poor trade. So in this instance averaging down has hurt you. So naturally the question becomes, "should you ever average down?" and that answer is "yes" at times.

    Let's use an example: Suppose you are into XYZ because they just announced good earnings a day ago and they are trad

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