How to calculate average entry price?

<p>The average entry price can be calculated in various ways. Here are few:</p><p id="isPasted"><strong>Inverse Perpetual &amp; Futures Contract</strong></p><p>Inverse Perpetual &amp; Futures contracts are quoted in USD and settled in cryptocurrency such as BTC. The average entry price is calculated as follows:</p><p>&nbsp;</p><p>Formula</p><p>Average entry price = Total quantity of contracts / Total contract value</p><p>Total contract value= [(Quantity1/Price1) + (Quantity2/Price2) + (Quantity3/Price3)....]&nbsp;</p><p>Take BTCUSD as an example,</p><p>A trader bought 50 contracts of BTCUSD at $10,000 and another 50 contracts at $15,000.</p><p>Total contract value in BTC = (50/10,000) + (50/15,000) = 0.00833333</p><p>Average entry price = 100/0.00833333 = $12,000</p><p><br></p><p id="isPasted"><strong>USDT Perpetual contract&nbsp;</strong></p><p>USDT perpetual contracts are quoted in USDT and settled in cryptocurrency such as USDT.</p><p>&nbsp;</p><p>Formula</p><p>Average entry price = Total contract value/Total quantity of contracts</p><p>Total contract value= [(Quantity1 × Price1) + (Quantity2 × Price2) + (Quantity3 × Price3)....]</p><p>Take BTCUSDT as an example,</p><p>A trader bought 1 BTC contract at 10,000 USDT and another 2 BTC contracts at 13,000 USDT</p><p>Average entry price = (1×10,000+2×13,000) / (1+2)=12,000 USDT</p><p><br></p><p id="isPasted"><strong>USDC Perpetual Contract</strong></p><p>The average entry price of the USDC perpetual contract is the weighted average price of your position during the current settlement cycle, which will be affected by the increases in position size. At the end of each settlement cycle, the Mark Price at the time of settlement will become the new average entry price.&nbsp;</p><p><br></p><p>Formula</p><p>Average Entry Price = Total Session Value/Total Trade Size&nbsp;</p><p>Total Session Value = [(Trade Price 1 × Trade Size 1) + (Trade Price 2 × Trade Size 2) …]</p><p><br></p><p>Take BTCUSDC as an example,</p><p>Trader A holds a long position of 0.5 BTC with an entry price $50,000. Trader A decides to increase the long position by opening another 0.8 BTC at an entry price of $51,000.</p><p>Total Session Value = (50,000 × 0.5) + (51,000 × 0.8) = 65,800 USDC</p><p>Average Entry Price = 65,800/(0.5 + 0.8) = $50,615.38</p>

<p id="isPasted">To calculate your average entry price (also known as "cost basis"), you use a weighted average based on the total amount spent divided by the total number of units or shares bought.</p><p>The Formula</p><p><strong><em>Average Price = Total Capital Invested/Total Units Owned</em></strong><br>&nbsp;</p><p id="isPasted"><strong>Step-by-Step Calculation</strong></p><ul><li>Multiply each individual purchase (Lot) by the price paid for that specific lot.</li><li>Add all those totals together to get your Total Investment.</li><li>Add the total number of units/shares purchased across all lots.</li><li>Divide the Total Investment (Step 2) by the Total Units (Step 3).</li></ul><p><br></p><p id="isPasted"><strong>Example (Forex/Stock)</strong></p><p>Imagine you are buying "The Cable" (GBP/USD) or a stock in three separate entries:</p><ul><li>Trade 1: 10 units at $1.2500 = $12.50</li><li>Trade 2: 20 units at $1.2700 = $25.40</li><li>Trade 3: 10 units at $1.2400 = $12.40</li></ul><p><strong>Step 1: Total Investment</strong></p><p>$12.50 + $25.40 + $12.40 = $50.30</p><p><strong>Step 2: Total Units</strong></p><p>10 + 20 + 10 = 40 units</p><p><strong>Step 3: Average Entry</strong></p><p>50.30/ 40=1.2575</p><p id="isPasted"><strong>Pro Tips for Traders</strong></p><ul><li>Commissions/Fees: To be truly accurate, add any transaction fees or commissions to your "Total Capital Invested" before dividing.</li><li>Partial Exits: If you sell a portion of your position, your average entry price does not change; only your total exposure and remaining capital change.</li><li>Automation: Most platforms like MetaTrader 5 or TradingView will display your "Average Price" automatically in the trade terminal if you have multiple open positions on the same asset.</li></ul>