You are right. Why continue to hold a losing order and increase the loss, hoping for luck, if according to the rules of the strategy it is clear that the conditions for the trade did not work and it is better to close it while the loss is small??
Hogwash. You don't know if the loss is going to get worse...(at least you guys) I would rather just average down and wait it out. Why realize a loss when you can average down and increase potential gains? The name of the game is getting the cheapest price possible...this shouldn't change just because you are holding shares.
A Tale Of Two Cities, two different cultures. If you are a long term investor, you would build your position gradually, hoping to buying it at a cheaper and cheaper price. You act like an owner. If you are a short term trader, you don't care about long term outcome, you act like a merchant buying and selling for a quick buck. The question I am struggling with is: Can a long term investor trade around his long term holding by averaging down on his short term trades and get away with it?
If your platform allows you utilize first in last out. An example.: Say your initial long position Is 20 contracts. So you go long on your initial. You can enter other trades and exit them as long as they are in the long direction and gain whatever points they render. So say you buy 5 contracts and sell them 3 minutes later for 4 points. Your initial 20 contract you may hold for several weeks is still in place. You can repeat these smaller quicker trades as often as you wish as long as your platform has that first in last out function. But you can't go short unless you run two accounts in say Sierra chart and trade your long term long position in one and take your short-term trades in the other. "In Sierra Chart, if you want to maintain both a Long and Short Position for the same symbol at the same time, then this is only possible by establishing a Short Position for the symbol in one Trade Account and a Long Position for the symbol in another Trade Account. Sierra Chart does not have the ability to maintain both a Long and Short Position for the same Symbol in the same Trade Account." My understanding is using Amp futures as ones broker allows multiple accounts and you can link them to Sierra chart platform. Interactive Brokers allows stock trading through Sierra is my understanding. Not sure about ETFs. Not sure if this is what you need or are talking about.