1. Most Discussed
  2. Gainers & Losers

smart pyramiding - how to do it

  1. hotcongo

    1,115 Posts.
    3
    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

DISCLAIMER:
Before making any financial decisions based on what you read, always consult an advisor or expert.

The HotCopper website is operated by Report Card Pty Ltd. Any information posted on the website has been prepared without taking into account your objectives, financial situation or needs and as such, you should before acting on the information or advice, consider the appropriateness of the information or advice in relation to your objectives, financial situation or needs. Please be aware that any information posted on this site should not be considered to be financial product advice.

From time to time comments aimed at manipulating other investors may appear on these forums. Posters may post overly optimistic or pessimistic comments on particular stocks, in an attempt to influence other investors. It is not possible for management to moderate all posts so some misleading and inaccurate posts may still appear on these forums. If you do have serious concerns with a post or posts you should report a Terms of Use Violation (TOU) on the link above. Unless specifically stated persons posting on this site are NOT investment advisors and do NOT hold the necessary licence, or have any formal training, to give investment advice.

Top

Thank you for visiting HotCopper

We have detected that you are running ad blocking software.


HotCopper relies on revenue generated from advertisers. Kindly disable your ad blocking software to return to the HotCopper website.

I understand, I have disabled my ad blocker. Let me in!

Need help? Click here for support.