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Scaling In

Adding to a position as price moves against your entry, lowering the average cost.

Scaling in (averaging in) builds a position in tranches as price dips below the entry, so each add improves your average price. It is the opposite of pyramiding, which adds into strength. Used deliberately at pre-planned levels it can turn a shaky entry into a strong average.

The danger is obvious: scaling into a falling market increases exposure exactly as the trade moves against you, so it must be bounded by a hard stop on the whole position and a fixed number of levels. It is not a substitute for being wrong.

Esempio

A long buys a third of its size at entry, another third 2% lower, and the last third 4% lower — three planned scale-in levels.

Come Noon Barbari usa Scaling In

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