I frequently talk about how you need to scale into your positions. When you scale in properly, this can significantly increase your potential profits. If you are disciplined or have a plan, scaling can be a huge benefit to your trading, but it can also play against you. I highly suggest that you have a carefully calculated plan before you ever start to scale in your positions.
What you are trying to do, is get your total average down while the price is decreasing. You will buy the coin as the price is going down (in increments) and then stop when the trend starts to become bullish again. You can use this strategy for both going long and short.
Here is a very basic visual example of a small long scale in:
100 shares @ $1.00 = $100
300 shares @ $0.50 = $150
300 shares @ $0.20 = $60
Total: 700 shares @ $0.57 = $310
Now lets say these buys happened over a week during a bear market. Then, the bulls start to take over and the coin goes all the way back up to $1.00, so now you would multiply 700 shares times $1.00. Your initial investment was $310 and you now have $700 so you more than doubled your money by scaling in at the proper time.
We can never predict the exact bottom of a market pullback so that is why this is a perfect strategy to work against that. You never want to put everything you have into one single trade at one time, that gives you no room to let the investment play out. A lot of people panic sell and start to have FUD when the markets start to pull, but you have to look at it like it’s a glorious opportunity to buy cheap now (get your averages down) and sell when the market bounces back. You must always do your own research when investing, its very important you know what your buying!!