Average Down Stock Calculator
Calculate your new average price after buying more shares at a lower price
What Is Average Down Stock Calculator?
Averaging down means buying more shares of a stock as its price drops to reduce your average entry price.
Example:
- First Buy: 100 shares @ $50 → $5,000 invested
- Stock drops to $40
- Second Buy: 100 shares @ $40 → $4,000 invested
- New Average Price: ($5,000 + $4,000) / 200 shares = $45/share
Now, the stock only needs to rebound to $45 (not $50) to break even.
Why Use an Average Down Stock Calculator?
1. Avoids Emotional Decisions
- Prevents panic buying without a plan.
2. Optimizes Position Sizing
- Ensures you don’t over-invest in a falling stock.
3. Calculates Break-Even Price Instantly
- Shows exactly where the stock needs to go to recover.
4. Works for Stocks & Crypto
- Useful for long-term investors & swing traders.
How to Calculate Average Down Manually
Formula:
New Avg Price=(Shares1×Price1)+(Shares2×Price2)Total SharesNew Avg Price=Total Shares(Shares1×Price1)+(Shares2×Price2)
Example:
| Buy | Shares | Price | Total Cost |
|---|---|---|---|
| 1st | 100 | $50 | $5,000 |
| 2nd | 100 | $40 | $4,000 |
| Total | 200 | $45 | $9,000 |
New Average Price = $9,000 / 200 = $45
5 Rules for Averaging Down Safely
- Only Average Down on Strong Stocks – Avoid failing companies.
- Limit to 2-3 Buys Max – Don’t throw good money after bad.
- Wait for Support Levels – Buy near $40 if $50 → $40 → $35 → $30.
- Use Stop-Losses – Prevent unlimited losses.
- Don’t Average Down on Meme Stocks – GME/AMC can keep crashing.
When NOT to Average Down
❌ The stock is in a downtrend with no reversal signs.
❌ The company has fundamental issues (debt, scandals).
❌ You’re already overexposed (>10% of portfolio).
FAQs About Averaging Down
1. Is averaging down a good strategy?
✅ Yes, if the stock is strong (e.g., AAPL dip). ❌ No, if it’s crashing (e.g., BBBY).
2. How many times should I average down?
Max 2-3 buys—otherwise, you’re bag-holding.
3. Does averaging down work in crypto?
Yes, but only on top coins (BTC/ETH)—altcoins can go to zero.
4. Should I average down or cut losses?
Cut losses if fundamentals worsen (e.g., bankruptcy risk).
5. Do professional traders average down?
Rarely—most prefer stop-losses & fresh entries.