Averaging Down vs Revenge Trading

Quick comparison to help you distinguish these two crypto terms.

Averaging Down
intermediate
psychology

The practice of purchasing additional units of an asset at a lower price after an initial position has declined in value, reducing the average entry cost while simultaneously increasing total exposure to a losing trade.

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Revenge Trading
intermediate
psychology

The impulsive act of entering new trades immediately after a loss with the primary motivation of recovering that loss quickly, driven by frustration and emotion rather than strategy or market analysis.

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