Hey there. I personally limit my holdings to 5-7%. However, if a company is showing strong momentum, I have no problem letting it run above this amount. Prime example, during the pandemic I had LSPD and TFII make up over 15% of my total portfolio each. I've since rebalanced (and they both make up about 7% each), but I let these go high due to the overall trajectory of the stocks.
Speculative plays also have a lower total allocation for me as well. For example, I have no problem taking a 5-7% initial position in a company like Telus, Fortis, CN Rail, OpenText etc (just spitballing names here) but I wouldn't be looking to take a 5-7% position in a company like Good Natured Products, even though gains from it have resulted in such (see the above about momentum).
In terms of the averaging, yes that is exactly how I would do it. If I had a $100,000 portfolio and wanted to take a $5000 position in a stock, I'd buy $2500 now and $2500 at a pre-determined date in the future.