Adding To A Loser

外汇网2021-06-19 14:37:31 82

The action of a trader/investor increasing a position in an assetwhenits priceis heading in the direction that's opposite to what theinvestor/trader desires.This is generally not a wise investment decision because unless the asset begins to move in the desired direction,the investor's losseswill increase.

An investormight add to a losing position instead of closing itbecausehe or shegets emotionally attached to the asset andhas a hard time accepting thatit was a bad investment. Once the trade moves substantially in thewrong direction, however,it may be time to consider closing out or re-evaluating the reasonfor havingthe position rather than putting more money at risk.

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