In this video, I teach viewers how to add to a position in a choppy market. I believe that it is crucial to have clean and simple base entries in leading stocks in leading groups.
The first rule is to buy stocks that have clean and simple bases that everyone can see. This is because when everyone sees the same base, it increases the potential that they will buy the stock, which will drive the price up. I used AMD as an example. AMD pushed through the top of its base with a volume pickup, and then it continued to move up. I suggested that you could add on to your position in AMD in this case, but not a lot. Your add-on should be 20% of your first purchase.
The second rule is to never double up on your position, especially in a choppy market. I said that you should control your risk and never add too much to your position, as this could pull your average price up too much. I used Microsoft as an example. Microsoft had a clean and simple base, and it pushed through the top of its base with volume. I suggested that you could buy Microsoft here and then add on 20% of your first purchase later if it continues to move up.
Full Youtube Video Here: Successful Use of a Watchlist to Get In & Then Add-on to a Position
I concluded the video by saying that the key to adding on to a position in a choppy market is to find stocks with clean and simple bases that everyone can see. If a stock breaks out of its base with volume, you can buy it and then add on later if it continues to move up. However, you should always control your risk and never double up on your position.
