This theory does not apply in general. You often find currencies falling to deeper and deeper bottoms, and you reinforce to preserve your assets, then you get stuck at a bottom from which you never get out, and you keep waiting in vain and lose more capital.

When the market indicator turns red and prices start to fall dramatically, many traders go into a state of fear and panic, which is one of the biggest mistakes that can lead to huge losses and destruction of capital.
Why do fear and panic occur?
1. Emotional response: Seeing a portfolio shrinking with every moment leads many to make irrational decisions in an attempt to protect capital.