Blindly averaging down is often not investing — it’s doubling down on your mistake.
Most traders add more shares simply because the price is cheaper, hoping to lower their average cost. But a falling price isn’t always a discount. Sometimes, it’s a market warning that your original trade thesis is broken.
Smart traders don’t average down to avoid losses. They only scale in if their original strategy still holds and planned entries allow it. When your buying reason disappears, pause, trim positions, or cut losses instead of chasing lower prices.
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