You heard of Paul Tudor Jones? There is or at least was a post-it at his screen . It's the second picture of him. http://www.streetstories.com/images/ptj_2.jpg
I don't average losers, if that's what you mean. Got a sell yesterday at 09. Current stop is at 34. Any short above 09 is an improvement of my entry price. (I was only 1 contract short... while I should be trading 2 initial size).
I think Paul Tudor Jones put a "don't average losers" in front of his eyes because he was prone to do it
This is exactly what it means: ... improvement of your entry prices. Yes, I think P.T.J. did it much to often himself.
I should have got 2 contracts short @ 09. If I only have 1, then if I can short the 2nd above 09 then it's a good price improvement. Not everything is "averaging into a loser"... this is rather a "scaling in".
Scaling in a loser is not good either Was scaling in at 4012 rally your plan? Why not 4018 or 4000 or 3994? Don't get me wrong, but I am writing this because I did the same several times.