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In traditional investing, you hear a lot about averaging down or lowering your cost basis to capture gains. Tune in to learn why this might not be the most viable strategy for trading low-priced stocks. Tim Bohen breaks it down with a specific chart to show you why. Check it out!
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🔴Stock Trading 101: A Day Trader's Guide: http://bit.ly/2sqs1ZZ
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No matter what ‘sage’ investment advice you may hear, don’t fall into the trap of averaging down. Especially when it comes to low-priced stocks. If you trade blue-chip stocks like Microsoft or Apple, maybe it could work for you. But here we’re talking specifically about day trading and swing trading.
Thing is, these are very volatile stocks that tend to spike and drop quickly. And too many new traders fall into the trap of trying to apply a traditional investment mindset to these volatile stocks. Today, Tim shows you with a specific stock. Watch the full video for a complete breakdown.
With this stock, you see it spikes ... and then drops hard, over and over again. If you average down in the stock every time it spikes, and then it fails, you can’t make a profitable trade. Look at the long-term chart. The stock fades and fades.
Keep in mind, the stock we’re looking at here — CEI — has had a few reverse splits through the years. This stock is fading. It’s a great example of why averaging down doesn’t always work.
If you're trying to add to a losing position, averaging down into every spike, it'll do the opposite of what you intend. Now you're trapped because it moves so quickly to the downside.
So, yeah, the stock bounces, but those bounces get smaller and smaller ... to the point where they're barely perceptible. Because every spike gets slammed. And the reverse splits dilute the stock even further, dilute the share count. You can get trapped. Getting back to profitability on a stock like this is near impossible.
This isn’t unusual in the land of low-priced stocks at all. We love these stocks for the momentum, the potential for meaty gains. But you need to understand why you should never average down into a loser. If you're a losing trader … if you're inconsistent … if you're struggling and adding to losers… that's loser behavior.
That’s not a smart, viable way to trade. And it's not a winning strategy over time.
#StocksToTrade #StockMarket #TradingStrategies
*Tim Bohen teaches skills others have used to make money. Most who receive free or paid content will make little or no money because they will not apply the skills being taught. Any results displayed may be exceptional. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable.
You can lose money trading stocks. Do not invest money you cannot afford to lose. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services.
🔴 Try StocksToTrade for $7: http://bit.ly/2R9bIJg
In traditional investing, you hear a lot about averaging down or lowering your cost basis to capture gains. Tune in to learn why this might not be the most viable strategy for trading low-priced stocks. Tim Bohen breaks it down with a specific chart to show you why. Check it out!
🔴 Subscribe for more free Stock Trading tips: YouTube.com/StocksToTrade
👉Share this video with a fellow Trader: https://youtu.be/fZ8pA3ZO5tw
✅ Links we mention and recommend:
🔵Try StocksToTrade for $7: http://bit.ly/2R9bIJg
🔵Get our FREE weekly watchlist here: http://bit.ly/36QqCuC
🔵Check out the SteadyTrade podcast: http://bit.ly/2RbDpRQ
✅ Recommended video: https://youtu.be/pKTTGa53hgI
✅ Recommended playlists:
🔴Stock Trading 101: A Day Trader's Guide: http://bit.ly/2sqs1ZZ
🔴Advanced Stock Trading Tips: http://bit.ly/3a32pTM
🔴 Trader Spotlight with Tim Bohen: http://bit.ly/36TTzG3
🔴StocksToTrade Software Tips and Tricks: http://bit.ly/375GSry
🔴Weekly Trading Recap Videos: http://bit.ly/3a32uXA
✅ Follow StocksToTrade on social media:
Instagram: https://www.instagram.com/stockstotrade/
Facebook: https://www.facebook.com/StocksToTrade/
Twitter: https://twitter.com/StocksToTrade
No matter what ‘sage’ investment advice you may hear, don’t fall into the trap of averaging down. Especially when it comes to low-priced stocks. If you trade blue-chip stocks like Microsoft or Apple, maybe it could work for you. But here we’re talking specifically about day trading and swing trading.
Thing is, these are very volatile stocks that tend to spike and drop quickly. And too many new traders fall into the trap of trying to apply a traditional investment mindset to these volatile stocks. Today, Tim shows you with a specific stock. Watch the full video for a complete breakdown.
With this stock, you see it spikes ... and then drops hard, over and over again. If you average down in the stock every time it spikes, and then it fails, you can’t make a profitable trade. Look at the long-term chart. The stock fades and fades.
Keep in mind, the stock we’re looking at here — CEI — has had a few reverse splits through the years. This stock is fading. It’s a great example of why averaging down doesn’t always work.
If you're trying to add to a losing position, averaging down into every spike, it'll do the opposite of what you intend. Now you're trapped because it moves so quickly to the downside.
So, yeah, the stock bounces, but those bounces get smaller and smaller ... to the point where they're barely perceptible. Because every spike gets slammed. And the reverse splits dilute the stock even further, dilute the share count. You can get trapped. Getting back to profitability on a stock like this is near impossible.
This isn’t unusual in the land of low-priced stocks at all. We love these stocks for the momentum, the potential for meaty gains. But you need to understand why you should never average down into a loser. If you're a losing trader … if you're inconsistent … if you're struggling and adding to losers… that's loser behavior.
That’s not a smart, viable way to trade. And it's not a winning strategy over time.
#StocksToTrade #StockMarket #TradingStrategies
*Tim Bohen teaches skills others have used to make money. Most who receive free or paid content will make little or no money because they will not apply the skills being taught. Any results displayed may be exceptional. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable.
You can lose money trading stocks. Do not invest money you cannot afford to lose. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services.
$SESN actually yes!!
This was good timing
I have added to a loser in the past and it was not the right move.
Funny that I watch this video at this moment in time. I am running through trade reviews from 2019 and come across a profit I took on CEI when I first started trading my live account back in July. I was meant to see this.
nope, other way around. thanks for the video.
For some reason I haven't been able to watch your live streams :/ today or yesterday.
not yet, just learning 🧠📈
Good to know! Thank you!
Adding to a losing position is one the dumbest things to do!!
Been averaging down on $CYDY since 2015…yes long term, but recent advancements in the FDA process and trial results have the stock at an inflection point. I am now up over $100K on my position just in the last 3 weeks. Should just get better from here. Agree, they are rare….and $CYDY is a gem.
yes i got saved on $ustc
after 3 months of practice and learning everyday i start next mothns
Tim you look like you mean business in your still picture on your YouTube video 😂 you look like don’t mess with me!! 💪🏽 😂
Agreed. Averaging down is not suitable for pennystocks but ideal for super long term investments. Also I've gotten lucky in the past and averaged down into a company that got acquired the following week 😃
This is a short trade. Who ever would play this long deserves the loss
I wanna know … have you ever been saved by adding to a loser? Leave a comment!