We're having a terminology problem.
Averaging down means buying more shares at a lower price, which increases number of shares held, while lowering you basis price. This brings the average price you've paid for all your shares down.
It's only a psychological advantage, not mathematical one. The Capital preservation plan sells shares on the way down. Reducing number of shares held. It's a mathematical advantage.
The difference is with Averaging down your buying in a down trending stock price. With Capital preservation your buying after the down trend does turn. One gambling on a bottom turn, the other trading after a bottom turn, at the most advantageous ROI point. Your not adding shares, adding to your loss. Your shedding shares, reducing your loss.
The main difference is placing the odds for success in your favor, after, not before, a reversal. And increasing your ROI mathematically, by doing so. Trading successfully is all in the timing and numbers within the trade.
I've always thought of Averaging down, as throwing good money after bad! Not the wises decision one can make. IMO the wise decision is to cut losses, not add to them. Your NOT averaging down by selling.
Good subject.
