"Some managers traded stocks, some traded bonds, some used fundamental analysis, and some simply traded throughout the day. But the only single thing the majority of them had in common was that they "scaled-in to positions". When they had conviction in a position, no matter what their style was, they bought more as price dropped.
As you likely know, in most books this is taught as a recipe for disaster. Isn't it taught never to buy more lower? Yes, it is. And who teaches this? Not the best hedge fund managers in the world. These people buy lower, and if given the opportunity, they buy even lower (I remember one 30-year veteran of the industry telling me to buy a stock he liked, and to go home and hope it drops so I could buy more at an even lower price...this man helped create wealth for some of the most successful people in the country for three decades using this exact approach)."
in Oil Trader`s Blog
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