You buy at $100, price drops to $80. Instinct says: Buy more, average entry becomes $90, a small bounce and I'm safe. It sounds smart, but it is only true for long term investors, but for a short term trader like you, it is no different than helping the robber take your money faster.
🔸Many people are confusing the two concepts of Investing and Trading
DCA (Investing): Planned longterm accumulation regardless of price, using disposable income, believing in intrinsic value.
Averaging Down (Trading): You entered a swing trade expecting a pump. Price drops, Thesis wrong. You add money to recover faster.
👉 You are throwing money into a bottomless pit. A coin can drop from $100 to $0. If you double down every 10% drop, you go broke before the bottom forms.
🔸 Golden Rule Losers Average Losers
Pro Traders only Average up (adding to winners). They add capital to winning trades, never to losing ones.
If a trade is wrong 👉 Cut immediately. Do not try to fix a mistake by increasing risk.
🔹 Never throw good money after bad money. Better to cut loss early and reset than let one bad trade sink your career.
Are you buying more because it was the plan all along, or just because you are scared and want to break even quickly?
News is for reference, not investment advice. Please read carefully before making a decision.
