Trading Education Platform SystemSubscribe for FreeSupport
Tools / Average down calculator

Average down calculator

Buying more at a lower price cuts your average cost. See by how much, and what it does to the move you need to get back to even.

FREE TOOL

A lower average, a bigger position

Buying more at a lower price cuts your average cost. See by how much, the new break-even and what it adds to the amount at stake.

  • New average price
  • Up to two extra purchases
  • Move needed to get back to even

▶ Explained on the page: averaging down versus doubling down

How it works

New average = total money spent ÷ total units held

Averaging down lowers the price you need to sell at to break even. It also makes the position bigger, so a further fall costs more than before. The calculator shows both: the smaller move needed to get back to even, and the larger value you now have at stake.

It works when you had a reason to buy that still holds. It is a trap when it is only a way to avoid accepting a loss. Decide the maximum you are willing to put into one idea before the first purchase, not after the price falls.

Related

DCA calculator

Crypto profit calculator

Drawdown calculator

Position size calculator

Questions people ask

What is the average down formula?

New average price = total money spent divided by total units after the purchase. Holding 10 units at $100 and buying $500 more at $50 gives $1,500 for 20 units, a new average of $75.

How do I calculate my average price?

Add up everything you spent and divide by the total number of units you hold after all purchases.

Is averaging down a good idea?

It depends on why price fell. If the reasons you bought are intact and the size stays within your plan, it can make sense. If you are adding to avoid a loss, it increases the damage.

What is doubling down?

Adding as much as you already hold. The average moves to the midpoint and your exposure doubles, so a further fall hurts twice as much.