There is a difference. By scaling in what you are doing is reinforcing your belief that you are not right about the trade. Did you not learn anything from watching Franz blow up ?
As a serious trader looking to master your game you cannot afford to allow emotional or perceived psychological needs to influence your willingness to protect yourself. The reason you must never add to a loser (under any circumstances) is because the probability of being on the correct side of the order flow has already become evident due to the open-trade loss you already are holding. You are on the loosing side to begin with, you haven't seen it right and that FACT alone, in and of itself says "liquidate"---nothing else.
disagree 100%. i know mere mortals like me or 99% of other people will ever get the exact low or exact high. this way 99% of the time i get a better avg price. it works trust me
P, it all boils down to the FACT that we all trade in different ways, but you can not say do this or do that, unless you understand the specifics. Here is a typical example. You are long max position size and your stop is 2 points from entry, you are currently down 1 point, so does that mean that you will liquidate because you are perhaps temporarily in negative equity?
see that's the difference. i'm entering with a avg trade mentaility to beging with and a little move agaisnt my initial psotion is a gift. for instance you buy a 20 lot at 1332. i'll buy 5 at 1332 ,5 at 1331.50,5 at 1331 and 5 at 1330.50 for an avg of 1331.25 or so with a stop at 1329.25 vs your 1330 stop. same principal but i get a better avg price. sure it might head straight up and i only get 5 but i'm willing to bet 90% of the time few get the "best" price and averagin lowers the cost base. i'm averaging down from a psotion of strength and nnot panic
I think we are having a case of crossed wires here. People blow up when they let the losing trade become a bigger loser by adding to a position which is already maxed out.
You have to let the trade work. Why scale when you can get all in, if you are right you catch the move, if you are wrong you lose your stop $. If you scale and are right your opportunity cost is the better price as it moves away from you. If you add as it goes up you are chasing the move. If you add as it goes down you are getting a lower cost but at the expense of adding to a loser.