A Right-Side Averaging Strategy Using Volume Confirmation and Rebound Sales
Summary
The article proposes a recovery approach for a losing equity position that avoids adding shares while price is still falling. It advises waiting for a low-price consolidation and a volume increase as signs that selling pressure may have eased, then using remaining cash to add to the position. In its illustration, a purchase after a prolonged low-level pause reduces the blended entry price.
The method then calls for selling the added shares into a rebound if volume weakens, returning cash to the account while retaining the original position. If price revisits the low without breaking it, the article treats a possible double bottom as another entry opportunity. The examples argue that repeated swings could offset some unrealized losses even without a full recovery to the initial purchase price. The article offers no backtest or evidence that volume reliably confirms a bottom; its specific levels and returns are illustrative, and the strategy carries the risk of continued decline and further losses.
Key ideas
- The method discourages averaging down during an established decline and waits for consolidation and higher volume.
- It uses remaining cash to add after a proposed right-side stabilization signal.
- It recommends selling the added shares on a weak-volume rebound to recover cash and realize a local gain.
- A revisit of the low that holds is treated as a possible double-bottom entry setup.
- The article provides illustrative scenarios rather than tested evidence, and a continued decline can deepen losses.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.