Knowledge Note | Average Entry Price
① Adding to a long position below the average entry price lowers the average, but also increases your position size, so a pullback of the same magnitude will result in greater losses.
② Funding fees paid while holding a position are also a cost. The longer you hold, the more fees you need to make up for; funding fees received can offset some of them.
③ Before adding to your position, consider your total position size and new liquidation price afterward. Don’t focus only on making the average entry price look better.
$BTC 82920.6 (+0.16%)
#BTC
① Adding to a long position below the average entry price lowers the average, but also increases your position size, so a pullback of the same magnitude will result in greater losses.
② Funding fees paid while holding a position are also a cost. The longer you hold, the more fees you need to make up for; funding fees received can offset some of them.
③ Before adding to your position, consider your total position size and new liquidation price afterward. Don’t focus only on making the average entry price look better.
$BTC 82920.6 (+0.16%)
#BTC