Buying or gambling?

"Remember that stocks are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don't make a second unless the first shows you a profit. Wait and watch.
I don't mean to be understood as advising persistent pyramiding. A man can pyramid and make big money that he couldn't make if he didn't pyramid; of course. But what I meant to say was this: Suppose a man's line is five hundred shares of stock. I say that he ought not to buy it all at once; not if he is speculating. If he is merely gambling the only advice I have to give him is, don't!
Suppose he buys his first hundred, and that promptly shows him a loss. Why should he go to work and get more stock? He ought to see at once that he is in wrong; at least temporarily."

(Edwin Lefevre - "Reminescences of a Stock Operator")

Buying in a bull market

"Let us suppose, for example, that I am buying some stock. I'll buy two thousand shares at 110. If the stock goes up to 111 after I buy it I am, at least temporarily, right in my operation, because it is a point higher; it shows me a profit. Well, because I am right I go in and buy another two thousand shares. If the market is still rising I buy a third lot of two thousand shares. Say the price goes to 114. I think it is enough for the time being. I now have a trading basis to work from. I am long six thousand shares at an average of 111-3/4 and the stock is selling at 114. I won't buy any more just then. I wait and see. I figure that at some stage of the rise there is going to be a reaction. I want to see how the market takes care of itself after that reaction. It will probably react to where I got my third lot. Say that after going higher it falls back to 112-1/4, and then rallies. Well, just as it goes back to 113-3/4 I shoot an order to buy four thousand at the market of course. Well, if I get that four thousand at 113-3/4 I know something is wrong and I'll give a testing order that is, I'll sell one thousand shares to see how the market takes it. But suppose thatof the order to buy the four thousand shares that I put in when the price was 113-3/4 I get two thousand at 114 and five hundred at 114-1/2 and the rest on the way up so that for the last five hundred I pay 115-1/2. Then I know I am right. It is the way I get the four thousand shares that tells me whether I am right in buying that particular stock at that particular time for of course I am working on the assumption that I have checked up general conditions pretty well and they are bullish. I never want to buy stocks too cheap or too easily."

(Edwin Lefevre - "Reminescences of a Stock Operator")

Some fundamentals of stock trading

"People don't seem to grasp easily the fundamentals of stock trading. I have often said that to buy on a rising market is the most comfortable way of buying stocks. Now, the point is not so much to buy as cheap as possible or go short at top prices, but to buy or sell at the right time. When I am bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don't buy long stock on a scale down, I buy on a scale up."

(Edwin Lefevre - "Reminescences of a Stock Operator")