Read? Bear market is here. Let's accumulate more by average down? (2)
Before you decide to average down or average up, know your Maths. It is simple mathematics on risks.
Assuming you have 2-3 batches of $10K each to average down or average up.
When you average up, with the $10K per batch purchase you will be buying less and less quantity of stocks on the way up.
When you average down, with the $10K per batch purchase you will be buying more and more quantity of stocks on the way down.
More quantity of stock means more volatility in any unrealized P/L. Guess who will be losing sleep if the stock price keeps falling?
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