smart pyramiding - how to do it

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    I'm keen on pyramiding my stock purchases when I'm confident the share will go a lot higher, but am not sure of the safest and most effective way to do it.

    What strategies work well for you?

    Here are my thoughts so far:

    1. Say I expect a stock to move from $1 to $2 in the next six months, the lowest risk time for purchasing the stock would be in the first quarter of the movement, rather than the subsequent quarters. Therefore, I should make most of my stock purchases before it hits $1.25.

    2. The amount spent on each purchase should diminish as the share price climbs to prevent a collapsing share price eating into too much profit.

    3. Because purchases made at the end of the price climb are riskier than those made earlier on, I should be more willing to remove these later purchases as soon as they lose money.

    4. I shouldn't spend more than 10% of my total funds on any one stock, no matter how rosy the prospects.

    Any other ideas?

    Thanks, Hotcongo
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