🧭 Contract Trading | Average Entry Price
· Key point: Adding to a long position at a price below your average entry price lowers the average, but also increases your position size—so a pullback of the same magnitude will result in a greater loss.
· Why: Averaging down only makes the average price look better; it does not reduce the risk of the overall position. The larger the position, the greater the profit or loss from the same price movement.
· In practice: Before adding to your position, calculate the resulting position size and new liquidation price. Don’t focus only on the lower average price.
$BTC 82450.01（+1.04%）
#BTC
· Key point: Adding to a long position at a price below your average entry price lowers the average, but also increases your position size—so a pullback of the same magnitude will result in a greater loss.
· Why: Averaging down only makes the average price look better; it does not reduce the risk of the overall position. The larger the position, the greater the profit or loss from the same price movement.
· In practice: Before adding to your position, calculate the resulting position size and new liquidation price. Don’t focus only on the lower average price.
$BTC 82450.01（+1.04%）
#BTC