Question about scaling into positions and managing drawdowns
Hey everyone, been lurking for a while and trying to get my head around proper risk management, specifically around scaling into positions. I'm paper trading $EURUSD and trying to be disciplined, but I keep running into this scenario. Say I have a thesis, get a decent entry for my initial smaller size, then the market moves against me a bit, but not enough to invalidate the idea. My initial thought is to add more at a better price, but then I'm increasing my overall average entry price closer to my stop, effectively increasing the risk on the entire position. Or I wait for confirmation, miss the move, and kick myself.
How do you all manage this dance between scaling in at a dip (potentially catching a falling knife) versus waiting for more confirmation (and potentially missing the move or getting a worse average)? Do you pre-define your scale-in points and size, or is it more adaptive? I'm trying to avoid that classic 'add to a loser' trap, but also don't want to leave too much on the table if my conviction is still there.