Eli5: with stocks going down why would someone hold and buy more on the way down (average down) and not just sell now and buy again when the stock bottoms out?
In: Mathematics
No one knows where the downs and ups and pivot points will be. Sure, in hindsight you should just “sell when the price goes down and buy when it turns around”, but those are IMPOSSIBLE to predict beforehand. It could just as easily do the opposite when you pull the trigger. Don’t let hindsight fool you into thinking that there are secret messages in the lines. There are not. I say this as a person who’s played in the stock market a LOT. You can trick yourself into seeing all sorts of things if you want to.
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