Dragon Leveling Strategy

There is never any reason to train a hero that you intend to use to train another hero. That is, there is no reason to train a hero unless you intend to keep it. However, the same is not true for dragons.

If you consider elixir to be cheap and dragons (for their XP) to be valuable, then the same conclusion can be drawn. That is, ignoring the cost in elixir, you will always lose XP by training a dragon that you are going to use to train another dragon, and you should instead use both dragons to train the third. Of course, dragon food costs zero elixir to use, so it should always be fed directly to the dragon you want to train.

High-level dragons, however, cost a ridiculous amount of elixir to train with other dragons, to the point that some players eventually stop using dragons to train other dragons at all, and they just sell their low-level dragons instead. Is there anything better to do with them?

There might be, depending on how much you value dragon XP versus elixir, and how much elixir it costs to train the dragon you want to train. If you find that elixir is in demand, then either wait to train your dragons later, or lean toward later stages than the thresholds described here. If you find that your elixir is full and you have little use for it, then lean toward earlier stages.

Training a dragon up to about 3* L2 or L3, 2* L5 or L6, or 1* L8 or L9
Use 1* L1 dragons directly. Also use 2* L1 dragons directly, or save them for training higher-level dragons.

Training 4* L1 and possibly L2 dragons, 3* L3 to L4 or L5, 2* L5 to L6 or L7, or 1* L9 to L10 or L11
Use 2* L1 dragons and 1* L2 dragons. Convert three 1* L1 dragons into a 1* L2 dragon by training one with the other two.

Training 4* L2 to L3, 3* L5 to L6, 2* L8 to L9, or 1* L11
Use 2* L1 dragons directly, but use 1* L1 dragons four at a time to train 2* L1 dragons into 2* L2s.

Training 5* L1 dragons, 4* L4, 3* L7, or 2* L10
Use 2* L2 dragons or 3* L1 dragons. Use 1* L1 dragons four at a time to train 2* L1 dragons into 2* L2s, and use remaining 2* L1 dragons to train other 2* L1 dragons into 2* L2 dragons.

Training 5* L2 dragons, 4* L5, 3* L8, or 2* L11
Same as the previous, or possibly use 2* L1 dragons five at a time to train 3* L1 dragons into 3* L2 dragons.

Training 5* L3 to L4 or L5, 4* L6 to L7 or L8, 3* L9 to L10 or L11
Use 3* L1 dragons directly, but use 1* L1 dragons and 2* L1 dragons to train 3* L1 dragons into 3* L2 dragons. When you have lots of 1* L1s, use eight of them and one 2* L1 all at once. When you run out of 1*s, then use five 2* L1s all at once.

Training 5* L5 to about L9 dragons, 4* L8 or higher, 3* L11
Use 3* L2 dragons. Use 1* L1 and 2* L1 and 3* L1 dragons to train 3* L1 dragons into 3* L2 dragons.

Training 5* around L9 or higher
Use 3* L3 dragons. When you have lots of 1* and 2* dragons, use nine 1* L1 dragons at once, followed by eight 2* L1 dragons to train a 3* L1 dragon into a 3* L2. Or use seven 1* L1 dragons followed by nine 2* L1s. When you start to run low (but before you run out), then use three 3* L1s, four 2* L1s, and two 1* L1s to train another 3* L1 into a 3* L2.

Justification
Coming soon.