Average Down Calculator
Averaging down is buying more of a position below your average cost, which pulls the average down. The new average is the total cost of every share divided by the total share count: 200 shares at 20.00 plus 200 more at 18.00 is $7,600 over 400 shares, a 19.00 average.
Enter the shares you hold, their average cost, and the price and size of the new buy. You get the new average, the money the add commits, how far price has to rise from the new buy to get back to even, and what each further drop costs before and after the add. Or enter a target average to see how many shares it takes. It is arithmetic on the numbers you type, so it never sees your chart or your account, and it never says whether to add.
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Average Down Calculator
Your new average cost, the climb back to even, and what the add puts at risk
Shares, units or coins, and fractions work. Long positions only.
Enter the shares you hold, their average cost, and the price and size of the new buy to see your new average.
How it works
How the new average cost is calculated
New average = (Shares held × Average cost + Shares added × Buy price) ÷ (Shares held + Shares added)
Rise to break even = (New average - Buy price) ÷ Buy price
Shares for a target = Shares held × (Average cost - Target) ÷ (Target - Buy price)
Money added = Shares added × Buy price
Each further 1% drop = Total shares × Buy price ÷ 100
The new average is total cost over total shares, so it always lands between your old average and the new buy price, closer to whichever side holds more shares. Break-even is measured from the buy price, because that is where price sits when you add. Prices are shown at the decimals you typed (never fewer than two). The new average is rounded up, so a sell at the average shown never lands below break-even. It gets an extra decimal or more when one step at your precision is more than a tenth of a percent of the price (a cent on a stock under $10, say, or on a sub-penny coin), and when rounding up would land it on the old average or the buy price. A solved share count is rounded up the same way, so the buy always reaches the target.
Worked examples
| Line | Stock, same-size add | BTC/USD, half-size add | Stock, 19.50 target |
|---|---|---|---|
| Work out | New average | New average | Shares for a target average |
| Held | 200 shares at 20.00 | 0.5 BTC at 64000.00 | 200 shares at 20.00 |
| Target average | Not set | Not set | 19.50 |
| New buy | 200 shares at 18.00 | 0.25 BTC at 58000.00 | 66.67 shares at 18.00 |
| Money added | $3,600 | $14,500 | $1,200.06 |
| Total position | 400 shares | 0.75 BTC | 266.67 shares |
| Cost basis | $4,000 to $7,600 | $32,000 to $46,500 | $4,000.00 to $5,200.06 |
| New average | 19.00 | 62000.00 | 19.50 |
| Rise back to even | 1.00 (5.56%) | 4000.00 (6.9%) | 1.50 (8.33%) |
| Without the add | 2.00 (11.11%) | 6000.00 (10.34%) | 2.00 (11.11%) |
| Paper loss at the buy price | $400 | $3,000 | $400 |
| Each further 1% drop | $36 to $72 | $290 to $435 | $36 to $48 |
On the stock, 200 shares at 20.00 plus 200 more at 18.00 is $7,600 over 400 shares, a 19.00 average. From 18.00 that needs a 5.56% climb to get back to even instead of 11.11%, and it puts $3,600 of new money into the trade. At 18.00 the loss is $400 either way, while each further 1% drop now costs $72 instead of $36. On BTC/USD, a half-size add of 0.25 BTC at 58000.00 moves a 64000.00 average to 62000.00 and cuts the climb back to even from 10.34% to 6.9%, for $14,500 more in the trade. With the 19.50 target, the solve says 66.67 shares (rounded up so the average lands on 19.50), which takes $1,200.06 at 18.00.
Target averages
How many shares a target average takes
Holding 200 shares at 20.00 and buying at 18.00, before the add each 1% drop costs $36.
| Target average | Shares to buy at 18.00 | Money it takes | Each further 1% drop after |
|---|---|---|---|
| 19.75 | 28.58 | $514.44 | $41.14 |
| 19.50 | 66.67 | $1,200.06 | $48 |
| 19.25 | 120 | $2,160 | $57.60 |
| 19.00 | 200 | $3,600 | $72 |
| 18.75 | 333.34 | $6,000.12 | $96 |
| 18.50 | 600 | $10,800 | $144 |
| 18.25 | 1,400 | $25,200 | $288 |
| 18.10 | 3,800 | $68,400 | $720 |
| 18.01 | 39,800 | $716,400 | $7,200 |
A 19.00 target takes 200 shares. Move the target halfway to the buy price, to 18.50, and it takes 600. At 18.10 it is 3,800 shares and $68,400, on a position that started at $4,000. Every share bought at 18.00 pulls the average closer to it, but no size gets it all the way there, which is why the calculator shows a message instead of a number for a target at or below the buy price.
An add is a new trade on top of an old one, so it can be sized like one. The position size calculator turns a stop and a risk percent into a share count, and the stop loss calculator works out where that stop sits. With more shares on, the same stop distance loses more dollars, so the planned loss changes when the size does.
Before you rely on it
What a lower average does not change
A lower average feels like a smaller loss. At the price you add, it is the same loss: the new shares are flat, and the old ones carry the paper loss they had a moment ago. What changes is size. More shares ride on the same chart, so every further drop costs more, and break-even still sits above the price you are looking at. This calculator shows what the add costs and what it puts at risk. It does not say whether to add. How a scale-in planned before the entry differs from an add decided after the trade went red is the subject of averaging down on a losing trade, which works through the same 200-share example.
Your broker's average can also differ from this one. FINRA's cost basis basics says the cost basis for stocks and bonds is "generally your purchase price for the securities" plus "additional costs such as the commission or other fees you paid to complete the transaction," and the IRS topic on the basis of assets puts it as "the purchase price plus any additional costs such as commissions and recording or transfer fees." This calculator leaves fees out, so its average is the price average, a little under your real cost basis. FINRA also notes that when you can't identify which shares you sold, tax rules generally treat the sale as the earliest shares bought ("first in, first out"), so the blended average here is a planning number, not a tax figure.
Common averaging down math mistakes
- Reading the lower average as a smaller loss. At the buy price the dollars lost are the same as before the add. Only the position got bigger.
- Measuring the climb from the old entry. After the add, break-even is the new average, and the climb that matters starts at the current price, not at your first buy.
- Running the numbers at the price you hoped for. A limit that fills lower or a market order that fills higher moves the average, so rerun it with the fill.
- Keeping the same stop distance on a bigger position. Twice the shares at the same distance is twice the dollars lost at the stop, so the planned loss changes when the size does.
- Chasing a target that sits close to the buy price. The share count climbs fast as the target nears the buy price (see the table above), and so does the money it takes.
How big a gain a deeper loss takes to win back, measured on what is left, is in the drawdown recovery calculator.
Grade the setup before you add to it
This calculator shows what the add costs and what it puts at risk. It can't tell you whether the chart still holds up. Upload a screenshot of the chart as it looks right now and SnapPChart grades the setup A+ to F in seconds, the same way it grades any fresh entry, with no idea you already hold it. A paid grade also returns an entry, a stop, and targets when the chart supports a trade plan.
Upload a Chart ScreenshotYour first grade is free and shows the setup's grade and the general read. Entry, stop, targets and the trade plan come with a paid plan.
Keep going
Related free tools and guides
- GuideAveraging down on a losing tradeThe same 200-share example, why a lower average is not a lower risk, and how a planned scale-in differs from an add decided after the trade went red.
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- Free toolDrawdown Recovery CalculatorFree drawdown recovery calculator: enter a drawdown % or your peak and current balance to see the gain needed to get back, and how long at your average gain.
- Free toolStop Loss CalculatorFree stop loss calculator: enter your entry and a percent, a dollar loss or an ATR multiple to get the stop price, money at risk and a take-profit at your R.
- Free toolDay Trading QuizFree day trading quiz: 12 questions on position sizing, risk:reward, VWAP, volume and stop placement, with drawn charts and every answer explained. No signup.
FAQ
Average down questions
How do you calculate averaging down?
Add up what every share cost and divide by the total share count. New average = (shares held × average cost + shares added × buy price) ÷ (shares held + shares added). 200 shares at $20 plus 200 more at $18 is $4,000 + $3,600 = $7,600 over 400 shares, a $19 average.
How many shares do I need to buy to average down to a target price?
Shares to buy = shares held × (average cost - target) ÷ (target - buy price). Holding 200 at $20 and buying at $18, a $19 target takes 200 × 1 ÷ 1 = 200 shares, and a $19.50 target takes 200 × 0.5 ÷ 1.5 = 66.67. The target has to sit between the buy price and your current average. The closer it gets to the buy price, the faster the count grows, and no number of shares gets the average all the way down to the buy price.
How much does the price need to rise to break even after averaging down?
Divide the gap between the new average and the buy price by the buy price. With a $19 average after buying at $18, that is 1 ÷ 18 = 5.56%. Without the add, $18 needs 11.11% to get back to $20. The climb is shorter because the break-even moved down, not because the stock got any more likely to make it.
Does averaging down reduce my loss?
Not at the price you add. Before the add, 200 shares bought at $20 are down $400 at $18. After adding 200 at $18, the 400 shares at a $19 average are down the same $400, because the new shares are flat. What the add changes is size: each further 1% drop from $18 now costs $72 instead of $36.
Does the calculator tell me whether to average down?
No. It shows what the add costs and what it puts at risk, in numbers. Whether the setup still holds is a question about the chart, not the arithmetic, and the calculator never sees the chart.
Does it work for crypto and fractional shares?
Yes. Share counts can be fractional, like 0.25 BTC, and prices keep the decimals you type. The dollar figures assume a 1.00 move is worth $1 per unit, which holds for coins and pairs quoted in US dollars when you count units. It covers long positions only, since adding to a losing short works the other way.
Does it include fees and commissions?
No. FINRA and the IRS both count commissions and other fees in a stock's cost basis, so the average your broker shows can sit a little above this one. For taxes, shares bought at different prices are tracked lot by lot, so treat this blended average as a planning number.
What if the new buy price is above my average?
Then it is averaging up. The buy raises your average instead of lowering it, and the calculator says so and shows the new average. In target mode no number of shares at that price lowers the average, so it shows a message instead of a share count.
Does this calculator read my chart or my account?
No. It does arithmetic on the numbers you type and nothing else. It does not see your chart, your broker account, your cost basis, or your trade history, and SnapPChart does not track your positions.
Benjamin Loh
Founder & Developer at SnapPChart
I build AI-powered tools for traders. I created SnapPChart to help day traders analyze chart patterns faster using computer vision and machine learning. Learn more · Follow on X
This calculator is for planning purposes only and is not financial advice. It computes a new average cost, the money an add commits, the rise back to break-even, and the shares a target average takes from the numbers you enter. It covers long positions only, leaves out fees and commissions, and does not know your broker's cost basis or whether an order will fill at its price. It does not say whether to add to a position. Trading involves risk of loss.