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If throwing good money after bad is generally a bad idea, is throwing more money after good Ok?
Is investing more money into a stock that you already have a stake, in which has gone up in price a good idea? What you describe here is a good idea when the stock keeps up-trending. The way to do it is say you have originally bought $1000 worth of shares, then the next purchase you buy $500 worth, then $250 worth. It is called pyramiding into your trades. However, this system would not be the best with simply a buy and hold when you keep holding even if the price starts freefalling. You would need to have a trailing stop loss on your initial trade, and then as you buy each additional trade your trailing stop loss would incorporate the additional trade and move to a level where if you get stopped out you will make an overall profit. With each additional trade your trailing stop will move higher and higher for higher protected profits. The whole point behind pyramid trading is to keep buying more of a stock that keeps performing well to increase your profits. However, each additional purchase is half the previous one so that you don't eat too much into existing profits (in the case of the uptrend reversing) and so as to not overcapitalise on the one stock. So you are using part of your existing profits in an attempt to make more profits.