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Scaling into losing positions: a lesson in discipline
My biggest single loss came from incrementally adding to a position that was moving against me, effectively averaging down with no defined bottom. The mental gymnastics of 'just one more small addition' quickly compound into significant risk exposure that overrides any initial stop-loss plan.
1 comments · 14 points
This sounds like a really tough lesson to learn the hard way. I'm trying to wrap my head around position sizing and risk management right now, and this example makes me wonder how to best define that 'bottom' or exit point when things aren't going as planned.