Averaging down
Risk & psychologyBuying more of a falling position to reduce the average purchase price.
In plain terms
It concentrates capital in whatever is falling fastest. Defensible only when the price fell and the business did not.
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Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Average price
Trading & ordersThe weighted average cost of a position built across multiple purchases.
In plain terms
Both pyramiding and averaging down improve how it looks. Only one improves your outcome.