How do those positions that lead to heavy losses really come about?

Here’s a painful truth—a lot of people lose big not because they misread the market direction, but because they die on the road of “buying more as it drops.”

You’ve definitely seen this kind of operation: the coin price keeps dropping, and all sorts of thoughts start popping up in your head.

“There’s support at this level,” so you place a limit order to catch the falling knife. The price keeps dropping, “Damn, it’s down to the daily moving average,” so you go all-in at market price. But it’s not over yet—the indicators show it’s oversold, MACD is diverging, “This time it’s definitely going to bounce,” so you buy again at market price. Finally, you see a round number level and think, “I’ll bet just this once,” and place another limit order.

And then? Your position gets heavier and your account gets deeper in the red.

Every time you add to your position, you feel justified, every time you think “this has to be the bottom.” But the market doesn’t stop just because you have reasons—if it’s meant to drop, it’ll drop; if you’re going to get liquidated, you’ll get liquidated. In the end, you either can’t take it anymore and sell at rock bottom, or you get liquidated and meet your maker.

This is the classic “averaging down trap”—it looks like you’re bottom-fishing, but you’re actually leveraging up your losses.