There are two primary DCA (Dollar Cost Averaging) strategies that traders employ:

1. DCA when an asset drops to a key high timeframe zone.

2. DCA into a losing trade.

The worst mistake a trader can make is averaging down into a losing trade. Many do this hoping for a bounce to break even, but this is often a recipe for deeper losses. Avoid adding to a losing position unless you're absolutely confident in your strategy. If your goal is merely to bounce back to break even, it’s wiser to accept the loss.

Always have an invalidation plan for your trades and be prepared to cut your losses once your strategy is invalidated.

#RiskManagement #TradingStrategy #SmartInvesting