Is it viable to keep piling into a long position to keep it from getting liquidated? Or is it usually better to close out?

Beginner Questions
1

I noticed that my liquidation price went down when I added some ETH to my 3x leveraged long position that I already had open. If the price of ETH keeps dropping, does it make sense to pile in more to prevent liquidation? Or is that somehow mathematically worse in the end? Thanks

2

I don’t know about ETH but adding to losing positions is generally a bad idea - it’s tantamount to chasing losses.

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3

@Johnny1974 so where I can get ideas about this?

4

@robertmichael77

Try googling Investopedia ‘Adding to losing trades’
Some scalpers like Al Brooks sometimes add to losing trades but it not something that he recommends to inexperienced traders.
I suppose you are thinking buy the dip ? But how low will it go ? Your account could go into meltdown.

5

Crypto currency trading is extremely speculative. However, now that Germany has opened its doors to accept cryptos, I would suggest the long term prospects of the major cryptos are favourable.

Currently ETH is trading at $2,500 within a WIDE range of c.$1,700 & c.$3,000 which is its support and resistance levels. If you have the money and margin to cover this low, then at worst you’ll be stopped out if you move your S/L to $1,670. Your first profit target should be around $2,940.

BTW, this is only my take on this, not a recommendation Best of luck…

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6

Sounds like guessing. Unless you have a set amount of money you’re willing to lose, I wouldn’t add more to it.

7

Just another thought and something I use in my trading.
I hold the view that it’s best to get out of a losing trade a quickly as possible cutting losses - you can always get back in at the same price if the trade comes back in your favour and remember there are no guarantees that losing trades will come back in your favour, a lot of hope can be lost, money too. Some traders have psychological problems with fear of loss for many reasons.

8

If you do a search on the term “Irrational Exuberance” you will get the idea of the flawed logic that says just keep piling in. Enjoy. I was around when the Fed Chairman Alan Greenspan made this expression very popular - a bit like Donald Rumsfeld’s “unknown unknowns” that I often contemplate when approaching a trade entry :cold_face:

10

If I may I would better close out in such a case. It also depends on your goals.

11

I advice against adding to a losing trade unless you’ve got a good risk appetite. If you’re someone who doesn’t takes losses lightly, it is probably not a good option for you.

12

Use SL according to your trading strategy.

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13

so what I should do?