I have not met any trader who has not once in their trading career used the strategy called averaging down. It is when you add to your position at a better price than the original thereby making your average entry better. It sounds smart, as if the stock was a good buy at 20 it must be a great buy at 15. It also compliments the old saying; buy low, sell high. There is just one thing; adding to losing trades is a one way ticket to failure! By adding to losing trades means you will ALWAYS add to all the losers and only some of the winners. The best winning trades are the ones that take off immediately and you will not be able to add to these trades. So the averaging down system sounds smart on the surface but the truth could not be any further from that. When adding to the position it should only be done when the trade is profitable. This means you will catch those strong winners and avoid those bad trades that go against you immediately after entering. Furthermore when adding only to winners, you will already have open profit making it mentally easier to trail the trade. The final thing that makes the most sense is that when you add only to winners is that you are so far proven correct in your assumption of the market direction. As trading is about odds and the edge, does it not makes sense to add when the odds are stacking up in your favor?