I concur. At least for day trading. If a trade is really going against you, you're not in tune with the market and probably should not be trading until you know whats going on. Take your loss and sit out. Problem with averaging, is once you start, you are commited to a dangerous path: Not being able to admit you are wrong. If you had 2 contracts on, by averaging you say "I cant take this as a loser...." and add another 2, to 4 contracts. Then it moves another 6 ticks against you, and if you couldnt take the loss for the first 2 contracts, you're certainly not taking it for 4 contracts. So you add another 4. Eventually, you pull it on a day with a 12-20 point up move and you're short 16, and at the end of the day you're looking at a $3000 loser. Had you just taken that first loss, you would have eaten maybe a $150 loss and probably gotten on the right side of the market And, of couse, as soon as you puke out your position, the market will finally give you that turn that would have let you scratch out.