is there ever a good time to average down?

[Bad_Badness]

Better to focus on averaging into winners first. Once you get the hang of that, then you can consider losers.

Two comments: 1)One should ALWAYS have the averaging into the position as part of the plan. I.e. your first entry should be less, or at least account for the next entry.
2) Averaging into losers is a bad mindset. You might take positions and have the next buy as a crutch.

 

[wxytrader]

youtube says average down: bad. ape not strong when average down.

this is just for basic knowledge not any specific trade or anything im doing at the moment (before people start suggesting)

i know in general averaging down is bad.
is it dependent on the skill of the trader? like a professional trader would be able to average down with more success? or is it same for everyone because its a psychological failure and even the professional would be considered as compromised in that state where he has to average down means he panicked and shoult exit the marky mark


what about agressive averaging down to wait for a small retracement to exit at smaller loss? is that a strategy that is being used by traders?
like if a trader is able to drop the average price down to where the price is now and wait for a small retracement. obviously its more risk but also higher chance of exiting without a loss. or is it a flawed strategy? explain why if you say yes.

im also curious if algos are programmed to average down in any conditions ever?

There is never not a good time to average down.

 

[wxytrader]

%%
THAT's abouy what F is now LOL
In hindsight/ better to add once or more to a winner .

Why would you add to a winner? All you're doing is increasing your break even.

 

[wxytrader]

Better to focus on averaging into winners first. Once you get the hang of that, then you can consider losers.

Two comments: 1)One should ALWAYS have the averaging into the position as part of the plan. I.e. your first entry should be less, or at least account for the next entry.
2) Averaging into losers is a bad mindset. You might take positions and have the next buy as a crutch.

Unless you got the absolute bottom which you won't, you are either averaging down or just holding on to a loser....which is fine. Averaging up makes no sense... by the time price is going up you should be loaded up.

 

[murray t turtle]

Why would you add to a winner? All you're doing is increasing your break even.

%%
I see your points;
but mostly wrong/uptrend son/Its a bull market you know.
Do you know??
Seldom if ever ''break even'' its a profit or loss/son that why its called P&L LOL
BUt dont add to SPXL @ $150top year s ago LOL

 

[maxinger]

Is there ever a good time to average down?


It depends on whether you want to earn or lose $$$$.

There are sadists
and ultra extremely angry/furious/mad/vengeful investors
who want to deplete their trading accounts faster.

If you are already long ....
During a downtrend, don't pray to the Trading God/Deity and hope
the price will go up. Don't HODL.
Instead, short the stock/market.

Good Luck!

 

[Overnight]

There is never not a good time to average down.

Until the reason for your averaging down goes away, and your losses multiply. Like what happened to DFV this month. (I think.)

 

[volpri]

In an uptrend many professional traders are buying more on pullbacks. As the uptrend pause sideways to down they are buying buying buying. In a downtrend they are adding more and more to pullbacks against their initial position. Thus they are “loading up” short or long as price moves against them. They are betting on the previous trend resuming.

If a pullback grows to 20 or more bars then it is a trading range no longer a PB and a good trader will likely get out at whatever price he can that hopefully will BE or a small profit. Then he will swap tactics and not trend trade but instead use TR trading tactics. Once a PB grows to 20 bars then a subsequent BO direction probability is about 50% top or 50% bottom BO.

 

[Overnight]

In an uptrend many professional traders are buying more on pullbacks. As the uptrend pause sideways to down they are buying buying buying. In a downtrend they are adding more and more to pullbacks against their initial position. Thus they are “loading up” short or long as price moves against them. They are betting on the previous trend resuming.

If a pullback grows to 20 or more bars then it is a trading range no longer a PB and a good trader will likely get out at whatever price he can that hopefully will BE or a small profit. Then he will swap tactics and not trend trade but instead use TR trading tactics. Once a PB grows to 20 bars then a subsequent BO direction probability is about 50% top or 50% bottom BO.

Why don't you try it and find out?

 

[Handle123]

Comes down to stats, as a scalper going for controlled noise, profitable direction, at how many ticks becomes wrong direction.