This is a very common mistake, an easy trap to fall into. You add even more to the losing position with the thinking that the original loss will be covered over with an even greater reward. The danger is of overexposure to one market. The risk then becomes of even greater losses. Like staking everything on the outcome of one horse in the Grand National to cover over all the other losses in the months before. It may seem to work on occasion, but don’t be fooled by a favourable escape on the odd time. With this approach when it goes wrong it will be worse than it ought to have been. Don’t lose all your hard-earned profit quickly.
So, heed the warning, and don’t add to losing trades. Instead, decide your risk tolerance at the beginning of the trade. Then, don’t increase that risk exposure if a trade is going against you. Don’t be tempted to increase that as the trade develops. If things move against you, accept the situation and move on. Losing is just part of trading.