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Work out the new average entry after adding to a position, and how far price must move to break even.
Your Result
The calculation runs in your browser. Rates used for currency conversion are indicative — check your broker for the exact figure.
Adding to a losing position lowers the average entry, which means price has less distance to travel before the trade is level again. That is the appeal. What the appeal hides is that the position is now larger, so every further pip against you costs more than it did.
The calculator shows both sides: the new average and the new cost per pip. Seeing them together is the point — the break-even moves closer while the damage per pip grows, and whether that trade is worth making depends on which one you were ignoring.
When to use it
- Before adding to a position, to see what the new average and exposure become.
- When scaling into a planned entry across two or three levels.
- When a broker shows only the blended entry and you want the arithmetic behind it.
- When deciding whether the total position still fits the risk limit.
The average is weighted by size, so the larger position pulls it further.
Average = (Lots₁ × Price₁ + Lots₂ × Price₂) ÷ (Lots₁ + Lots₂)
Total Size = Lots₁ + Lots₂
Break Even Move = |Average − Current Price|- Equal sizes put the average exactly halfway. An addition twice the size of the original pulls it two thirds of the way to the new price.
- Cost per pip is worked out on the total position, so doubling the size doubles what every further pip costs.
- The calculator assumes both entries are on the same side. Adding an opposite position is a hedge, which is a different calculation.
One lot bought at 1.0900, then another lot added at 1.0800.
Working: price now needs to rise 50 pips rather than 100 to reach break even. But the position is 2.00 lots, so every further pip down costs $20 instead of $10. The recovery got closer and the bleeding got faster at the same time.
Is averaging down a bad idea?
It depends entirely on whether it was planned. Scaling into a level decided in advance is a strategy. Adding because the position is losing and you want it back is how small losses become account-ending ones.
How does this differ from DCA?
Dollar cost averaging is a fixed schedule applied regardless of price. Averaging down is triggered by a loss. The arithmetic overlaps; the decision does not.
Should I move my stop after averaging down?
If you keep the original stop, the loss it represents has roughly doubled along with the position. Recalculate what the stop now costs before deciding — the loss calculator will show it.
Does this work for averaging up?
Yes. Enter the higher price as the second entry and the average moves up. The same warning applies in reverse: the position is bigger, so the give-back on a reversal is larger.
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