Averaging down means buying more as the price falls. It converts a small loss into a larger position at a better average price, and it is the single most common way that disciplined accounts become undisciplined ones.
The core problem is that it inverts risk control. Size grows precisely as the evidence against the thesis grows, and the loss at the eventual stop is multiples of the original plan. Buy 100 at $50 with a $48 stop and the risk is $200; add 200 more at $48 with the same "it has to bounce" logic and a move to $45 costs $1,100.
It is defensible only when the additions were planned before entry, sized within one risk unit in total, and bounded by a real stop - which is scaling-in, not averaging down. In leveraged products with forced-liquidation, averaging down has no safe version at all.
Related: scaling-in, martingale, loss-aversion