Averaging in the stock

General
1

Whether it is good to average when the stock price goes up or down in both cash & derivatives segment…??

2

Hi vaibhav,
if you are long and price moves down and you buy again - this is averaging.
If you sell and price moves upwards you sell again - this is also averaging.

But reverse of this is pyramiding.

Averaging is riskier than pyramiding.

3

What is pyramiding pls explain in detail

4

Reverse of averaging:

  1. You think price will rise, you buy but only 1/3rd quantity.
  2. And price rises.
  3. So you buy again 1/3rd Q.
  4. Price moves up more. You buy remaining quantity.
  5. You exit as per your strategy to maximize profits and cut losses
5

Thanks to guide

6

Well bro,
its pleasure!

7

This is Pyramiding. I think it’s a typo from your side.

1 Like
8

Google about Pyramiding and inverse pyramiding in the markets.

9

You might find this video useful. It has some great insights into averaging for traders:

10

Thanks

11

Don’t do it … a lot of averaging in script gonna be like martingle trading … which usually wipe out your account …