I was thinking of different ways of controlling risk when averaging down (or rather scaling in) on an intra-day basis in the futures market. The issue I have is whether to use a certain price level/area where you exit for a loss, or rather a monetary stop on the trade.
The other aspect is that with averaging down you end up with a huge loss on your max position size and make frequent profitable trades with a smaller size. How do you deal with that? You enter the trade, starting small, it…