It's a semantic point. My own experience is that everyone in the industry whom I've ever heard discussing it, over the decades, has used the term "scaling in" to refer to adding to positions already in profit ("adding to winners"), but used the term "averaging in" (disdainfully) to refer to adding to losing positions ("adding to losers"/"adding to bad entries"). Those are also certainly the meanings used by the traders interviewed by Jack Schwager in his Market Wizards series of books, where the subject comes up. And in other books where I've seen it discussed. But of course, there's still nothing to stop you from using the terms interchangeably, if you wish to. The problem here isn't that you're using the terms differently from other people: it's with your obnoxious, insulting behavior. The forum's obviously unmoderated at the moment but we can all see that this - together with your other comments - is hostile and offensive to a level that simply wouldn't be tolerated anywhere else. That's a real shame, and is obviously costing the forum membership and participation. It would help a lot of people if you could please try to be less rude.
We “scale in” when the immediate trend is going our way. We “average in” when the immediate trend is going against us. Wizards dislike “averaging in” because you’re adding exposure while the market is proving you wrong or at least … not proving you right. Which means the uncertainty isn’t being resolved (or worst the odds are shifting against you) then why increase exposure (conviction) ? Padu said nice things about it in the thread a few pages ago. Now you can break your large order into smaller ones and layer the tape with limits to average your position down. That’s still one unit that you’re averaging down … While risk is respected and the logic of the trade is still valid then there’s nothing wrong about averaging down.
Scaling in may limit your Profits due to increasing the average Price, but it limits your Losses due to being cautious on the initial Entry. Its more of a Risk Management technique. Test the hot Water with just a Toe rather than plunge your whole Foot into Boiling water.
the main difference between scaling in and averaging is that the former is planned.it is an integral part of the trading plan