Yes mmaatt78, I’m inclined to agree with your thoughts and the spread for me yesterday (Tues) was only 5 so in the long term, not a problem. I’m in this oil trade myself for the longer-term, months maybe years. So having the time to be patient I allocated an overall % of my portfolio to this oil postion and bought 25% of this today @ 3.41 with another limit buy order @ 2.51 for another 25% just in case oil has a fast drop and I’m not at my computer and if it drops even further I’m buying another 25% then, so averaging down (or can be called dollar-cost averaging) .
If I was trading in the shorter timeframes like I do with forex I never average down and instead use a stop loss and if I’m wrong i just take the loss but then in those shorter time frame trades I’ll risk only 0.5% of my trading capital per trade. But in these month/years investing positions I’m patient as I expect some more ups and downs in the oil price. The disadvantage to averaging down is if the oil price takes off and never looks back I will only have 25% of my intended overall position size to take advantage of. But no one knows the future so I’m at ease with that…I probably went on too long if you are just starting out, look after your risk first and the profits will look after themselves. Keep learning and make your own decisions never put too much weight in other ideas, (mine included) test them out for yourself enjoy the journey.