If you’re using a laddering (averaging) logic, single-sided averaging is better

When thinking about scale-in logic

There is a concept of averaging down by going long and short (hedging) at the same time

Basically, while the price is moving against you, losses expand

Essentially, whichever direction it moves, since you are hedging, losses will expand

At this time

If you operate with a single-position mindset

You can perform averaging down in the favorable direction with a single position

For example

In a trending market, even if it is hedged, you switch to single-position averaging down at an N-shaped follow position

Behind hedged averaging down there exists the possibility that either side could move against you

Therefore, you should adopt a single-position, conscious averaging-down logic

Also, with hedged averaging down

You cannot cut the losses on the lot that’s moving against you

Because you think “it might revert,” since you are hedging

However, with single-position averaging down

Since you have a “single-position focus,” you can “accept the loss,” and stop out

(In other words, the mechanism by which averaging down increases capital lies in where you cut losses)

The required thinking for single-position averaging down is to cut losses, not to pivot

If you incorporate pivoting into single-position averaging down, you will face a back-and-forth beating

The market conditions in which averaging-down logic works

We trade only in past-market patterns where averaging-down logic works

In other words, we “take a break” in certain market patterns and “trade” in others

Choosing to pivot is equivalent to ignoring market patterns

That’s why you end up losing because you cannot increase capital in the end

Single-position averaging down plus market patterns enables us to incorporate the elements of “trade,” “cut losses,” and “rest”

thereby the single-position averaging-down logic becomes viable

The single-position averaging-down logic will hold

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