Average Down Calculator
New average entry, new break-even and where liquidation moves.
How it works
The new average is the total cost divided by the total size — nothing more. What makes averaging down worth calculating rather than eyeballing is the second-order effect: the break-even improves, but so does the amount you lose if the level you were wrong about keeps being wrong.
Liquidation is the part most traders get backwards. Adding at the same leverage brings fresh margin along with fresh size, so the liquidation price moves away from the current price, not towards it. The position is safer per unit and larger in total — which is why averaging down is a sizing decision, not a rescue.
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How the Average Down Calculator works
An average down calculator tells you what your position becomes after you add to it: the new average entry, how far price must travel to break even, what the addition costs in margin, and where liquidation ends up. The arithmetic is simple; the reason to run it before clicking is that it makes the trade-off visible.
Averaging down is a sizing decision, not a rescue
Adding to a losing position lowers the average entry, which lowers the move needed to get back to flat. That is real and it is why the technique exists. What it does not do is make the original thesis more likely to be right — it increases the amount riding on it.
The honest framing is the one the position size calculator uses: decide the total risk first, then decide how to distribute entries within it. Averaging down as part of a planned scale-in is sizing. Averaging down because the position is red is a different activity that happens to use the same arithmetic.
The liquidation price moves away, not closer
This is the part most traders have backwards. Adding at the same leverage posts fresh margin alongside the fresh size, so the combined position's liquidation price sits further from the current price than the original position's did. Per unit of exposure, the trade is safer than it was.
The catch is that there is more exposure. The liquidation is further in percentage terms and the loss on reaching it is larger in absolute terms. If you add without adding margin — using the buffer already posted — the effect reverses and liquidation comes towards you, which is how averaging down actually kills accounts.
Watch the tier boundary
On every major venue the maintenance margin rate is tiered by position value, so an addition that pushes the total across a boundary raises the rate on the whole position. The liquidation price moves against you by more than the new average alone would suggest.
The per-exchange liquidation pages show where those boundaries sit. If the addition would land near one, the useful thing to know is that the next tier's rate is effectively your rate.
FAQ
How do I calculate a new average entry price?
Multiply each entry by its size, add them, and divide by the total size. The result always falls between the two prices, closer to whichever leg is larger. Position value, not the number of fills, is what weights it.
Does averaging down reduce my risk?
It reduces the move needed to break even and, if the addition brings its own margin, moves liquidation further away. It increases the money at stake. Whether that is a reduction in risk depends entirely on whether you would have opened the larger position from scratch at this price.
Should I average down on a leveraged position?
Only inside a plan that accounted for it before entry. Leverage compresses the distance between averaging down and liquidation, and the temptation is strongest exactly when the remaining buffer is thinnest. If the addition was not planned, what you are doing is raising risk in response to being wrong.
What about averaging up?
Adding on the profitable side drags the average against you and pushes break-even further away, but it does so with unrealised profit already banked in the position. The calculator handles it — the warning simply points out that it is not averaging down and should not be judged by the same yardstick.