Money management investing in stock market

Money management sometimes play much more important roles when comes to investing.

What do I mean by good money management? Many expert especially professional trader, focusing on how to manage their money to achieve "win more,loss less". Sound really simple and common sense,but people sometimes blindly risking their money too much expose to unnecessary risk just by catching the trend.

Some really common sense method to me like "pyramid" method, Dollar cost averaging and Lower average cost.

(1) Pyramid method according to some expert, the higher the share price, the lower amount you would've to invest in the stock.However, when the share price become lower than you initial entry price, you don't catch the falling dagger, instead focusing on stop losses.By this you should achieve gain more, loss less.

(2)Dollar cost averaging states that you place some amount of money for regular period regardless where the share price going.

(3)Lower cost averaging, same as pyramid method but the lower the share price compared to your initial entry price, the more you buy.

Common sense tell us every method has its own way to apply and when to apply.

Pyramid method (1) is the best way for trading method.Most trader cares about major trend,focusing on the volume of trading and momentum, ignore the value of the shares. For this reason alone, you don't know the value of share and might be easily catch a falling knife.This is the method I usually apply on short term investment (usually few months to 1 year type). I like occasionally trade sometimes, pick something that I am really confident to feel where the major trend going. Unfortunately, usually only made very little money from this type of investment purpose( Not for trading purpose). Sometimes your effort doesn't feel worth it. Honestly, this type of investment I usually treat it as hobby, trading when I feel it is the right time.

(2) Dollar cost averaging, usually from my observation it is preferred by dividend hunting investor. Personally think, this method is only good enough for a stock that can compound adequately and pay good dividend.Most people apply this method to a wrong stocks from beginning. Some stocks that lack of growth, while paying good dividend, in other way defined by me as riskier bond ( capital gain is limited but dividend is given constantly like bond). For example, REITs which is very popular class of investment now.Other blue chips stocks that are obviously matured do behave in this way too. For entertainment purpose, I will share the stories from what I heard.:) There is one uncle that I heard, he constantly using this method to buy HSBC  (HKSE:0005) stocks in HKSE. What happen when HSBC do involve in sub prime crisis and the last money laundering scandal in US and mexico done by HSBC? The share price drops like no tomorrow.This method obviously only apply to high income individual, you can afford to put regular amount of $$ at the sametimes when bargain comes, you can buy a lot. This is very good for someone who really rich in cash and high income.

3) Value investor favourite for Lower cost averaging. But value investor should be careful of value trap.Besides this is a really good method to buy during stock market in recession. Once again, provided you choose the correct stock!