FX Trading: The Difference Between Those Who Lose and Those Who Win with Averaging Down

It's Kaerun here! 🐸
Everyone, are you averaging down!?
Wait, no, no!
You should basically avoid averaging down. It's not a very good method. I want to state that right from the start.

Please read this with the understanding that averaging down is by no means something to be praised.

There are times when you just have to average down... such occasions do exist.
In reality, there are times when averaging down saves you, and there are times when it results in increased profits.

However, there are people who keep losing by averaging down, and people who win by averaging down. What is the difference?

Simply put, it's whether or not you have a rule.
For example, when I am trading with my Habit-based 3-Line FX Trading, there are times when I think, 'Hmm... what the heck!' and add to my position.
But at that time, I have already decided on a rule that says if it reaches this point, it's no good.
Please read the article for specific stop-loss rules and the like.

People who have set a line where they say, 'If it reaches this point, I'll stop, I'll cut it,' can keep fighting even if they lose temporarily by averaging down because the damage remains small, and in total, their winning amounts tend to be higher.
Also, consider the purpose for which you are averaging down.

People who add to positions at excessively narrow intervals are those with a strong desire to inflate their profits through averaging down.
People who do this will never be able to win in the long run, and doing so is proof that their strategy is poor to begin with.

Averaging down is strictly a helping hand. When you absolutely must, do it as a last resort with a set rule.
But basically, it is not recommended!

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