A prudent but more complex way to get into a stock is to piecemeal your purchase as it proves to be successful. Let's say you're investing $5,000 in a stock. You could start by buying half that amount up front, or $2,500. Then watch what happens. If the stock goes down 8% or more, sell it all.

But if the stock goes up 2% or 3% and still looks healthy, consider buying another 30% of your planned investment, or $1,500. If the stock goes up again, to where it's advanced 5% above your purchase price, then buy the remaining $1,000. This strategy is called pyramiding.

This way you add resources to your most powerful stocks. Pyramiding is a complicated strategy best executed with the aid of stock charts that help determine if you're making the right moves at the right time. Always make sure the market is in an uptrend. You also need to watch for "overextended" stocks that have gone up drastically and may be due for a drop in price. To avoid this, buy stocks soon after they take off from a sound basing chart pattern. The stock-selling course explains how to spot these situations.

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