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Trader A: Buy at 2.20..& price drop to 2.00..top up more..average down 2.10..but price still drop 1.80..top up more..& let say average holding price 2.00..now still 10% paper loss..& don't know when the price will rebounce..
Trader B: had Trade plan Buy @ 2.20 & Cut Loss is 2.10..now it had executed it plan..realize loss @ 5%..Now he just monitor the price keep dropping..let say..it touch 1.70 & the price start small rebounce..buy @ 1.72 & price rebounce back to 1.90 & sell..10% gain minus 5% CL..still win..