HI,
I am kind of new to stock market but willing to know the basic funda/logic behind the decission making.
HOW AND WHEN TO DECIDE SHARES?
1. AVERAGE ( Existing shares )
2. SELL (Existing shares)
3. BUY ( New Buy shares )
Thanks in advance.
Regards,
bABIDASH
1. Buy :-
When downtrend reverses and starts an uptrend.
On support Levels/ Trendline Support
On Break Out or Breakout+Pullback (Breakout is the riskiest).
2. Sell (Existiing Shares):-
When Uptrend reverses and starts an downtrend.
On Resistence Levels/ Trendline Resistence
On Support/Trendline Break-Down
3. Average (Existing Shares):-
Most of the technical analysts will say "No" to it. As Paul Tudor Jones said , "Losers average Losers" but Warren Buffet will laugh in your face and Marty Schwartz will say "Double when you are ready to puke".
As per me, one should average in the following cases:-
1. If the seurity is still in uptrend, buy very near to your stop-loss level and keep the same stop-loss for the entire trade.
2. If one held a position during downtrend, average when the new uptrend starts but keep the new position as a new trade and maintain its seperate stop-loss. Keep adding to this new trade on every decline in the new uptrend. Once the new uptrend is over, the entire position should be sold.
3. If there is a very good support on a higher-time frame, try initiating a new trade with the support level as stop.
4. If holding securities in an intermediate downtrend, keep writing calls to reduce the cost.