You long an asset because you expect to sell it at a higher price (or because it hedges against some other asset in your portfolio). You short an asset because you expect to buy it back at a lower price. Not every strategy has a strong opinion on the fundamental value of an asset (none of the strategies I run do), and even those that do, might place an offer higher than their fundamental value because they know that the other side of the market is willing to pay that higher price. Similarly, one might sell an asset below their fundamental value because they believe the price will continue to move against them in the short term.
A strategy that indiscriminately buys more of an asset as the asset price goes down only works with an infinite bankroll. Such a strategy run with a finite bankroll will necessarily blow up eventually. Rigid stop losses mostly just increase the volatility of a strategy though (which also contributes to portfolio drag). A sustainable strategy harvests volatility of the underlying (mean reversion) and/or dynamically deleverages (momentum) as the price moves against the entry.
A strategy that indiscriminately buys more of an asset as the asset price goes down only works with an infinite bankroll. Such a strategy run with a finite bankroll will necessarily blow up eventually. Rigid stop losses mostly just increase the volatility of a strategy though (which also contributes to portfolio drag). A sustainable strategy harvests volatility of the underlying (mean reversion) and/or dynamically deleverages (momentum) as the price moves against the entry.