You are just betting that the price will come in your favor .. one day.
Which with most major indices it will. You just have to hope that the dips along the way are not too big! Markets have changed over time also. Trading rules have been put into place that prevent shorting when stocks fall too far too quickly and only allow buying at a higher tick. A slow and steady decline in a world wide recession could still happen but I think that the markets are very different beasts today compared to the flash crashes of before. Plus there is now so much money out there that is dependent on the market values going up that I think major sudden declines are hopefully a thing of the past. This is why I am re-checking out averaging down (or getting a better entry as I like to think of it) with testing mainly based on data since 2000.
I am looking at the bigger picture of major indices on daily or weekly charts and would never consider something like this that is close to martingale on short time frame charts – that would be suicide. I am thinking more Buffet than martingale suicide!
