Scale In
Scaling in is an investment strategy similar to averaging down, but slightly differs. When an investor scales in, he sets a target buy price and amount for the stockĀ and keeps buying until the stock stops falling or the intended position size is attained. This is done to reduce the average purchase price under ideal circumstances. With averaging down however, an investor just buys a stock that has fallen to lower his average purchase price. It could be said scaling in is pre-planned while averaging down is acting spontaneously according to circumstances.
Since many orders will be placed when scaling in, this is only for large investors whose commissions as a percentage of investment are minimal.
