Average Down Calculator

Averaging down means buying more of a position at a lower price, which pulls your average entry — your cost basis — toward the newer, cheaper buys. The blended average is simply total cost divided by total shares:

average = Σ(priceᵢ × qtyᵢ) / Σ qtyᵢ

Worked example: 10 shares at $100 and 10 at $80 is (1,000 + 800) / 20 = $90 average across 20 shares. Add 20 more at $60 and the average drops to (1,800 + 1,200) / 40 = $75. Because the average is share-weighted, a larger buy at a lower price moves it more — which is exactly why the target-average helper above solves for the share count you would need at a given price.

A lower average feels like progress, but it is bought with more capital committed to a position that is already losing. Averaging down doubles your exposure to being wrong: if the decline continues, you now lose more per further percent down, and your break-even still sits above the current price. It converts a small loss into a large one whenever the thesis was simply wrong rather than mispriced.

Before adding to a loser, size the reality of the hole: the loss recovery calculator shows the gain still needed to break even, and the risk of ruin calculator quantifies how repeated averaging-down raises the odds of a terminal drawdown. Disciplined traders pre-decide their maximum position and stop — averaging down without a limit is how a manageable loss becomes an account-defining one.