In this episode of Breaking News to Trading Moves, we explore one of the most debated questions in investing and trading: should you buy more of a losing position when the price falls, or should you follow strict mechanical rules and exit before the loss becomes dangerous?

The discussion starts with a simple property analogy. Imagine buying a high-quality, cash-flowing property in a strong location, only to see a similar property next door offered at a 30% discount because of a short-term panic. If the rental income, location and long-term value are still intact, buying more could be rational.

The case for averaging down

Averaging down can make sense when the business behind the asset remains strong. If the balance sheet, cash flow, competitive position and sector outlook are stil ...