I have recently made some changes to my page by adding a few more keywords. Now my site has dropped down 6 spots.
Google are making a number of changes recently so it may not be related to direct content changes - could be the "google dance" i.e placements keep changing. If it's just a few key words that you have added, and isn't to spammy,then it shouldn't have a negative effect.
Yes check your site for keyword stuffing.. i think your stuffed keyword into your site thats y ranking dropped ..
Adding more number of keywords to a page will dilute the page relevance for keywords and even you may loose rankings. I would suggest not to target two competitive keywords for a single page. One competitive term and additional low competitive key terms would do better.
It shouldn't affect your rankings unless you have stuffed the page with keywords. Dropping 6 places doesn't sound like much, next week you'll probably be back where you started!
you won't know it until you get banned but since you're not banned then i guess its just the dance and you'll be back soon.
If your site only dropped 6 spots then you are not banned. The drop could be attributed to changes you made or could be the result of natural fluctuations in the rankings. Google makes changes to their algorithm daily and your competitors are most likely also optimizing their site so the rankings are constantly changing. To answer your question though, yes you can over optimize your site if you are not careful. As many others have already pointed out, do not stuff your key phrase into every possible place, but add it where it naturally fits and you should be ok. Also do not fall into the trap of trying to sculpt your pagerank with nofollow tags.
I agree. Google is constantly changing their algorithm which would mean you will see your rank go up and down. As for keywords, make sure that your articles are optimized for keywords one at a time. Do not place them all over your posts, this will not help at all.
Yes there is such thing as over optimizing. And Google don't like that. In SEO there are what they call keyword frequency and keyword density. Keyword frequency is the number of times you use a keyword. Keyword density is the ratio of a keyword to the total number of words you use on the page or write-up. Anything that is over 5percent of a keyword that you use versus the total number of words on the page/article is not good. Make sure that you don't stuff keywords. Remember, anything excess is not good.