Your average entry is your real break-even
Knowing the weighted average tells you exactly where price must return for you to be even. Plan adds with the average down calculator and exits with the DCA exit calculator.
Your real entry after multiple buys
Buy 1 ETH at $3,000 and 2 ETH at $2,400 and your position's entry isn't $2,700 — it's the weighted average: (1×3000 + 2×2400) ÷ 3 = $2,600. Weighting by size is the whole trick, and eyeballing it goes wrong as soon as the buys are unequal.
Why precision matters: your break-even, your PnL, and your stop distances all key off this number. A trader who thinks his average is $2,700 when it's $2,600 sets his break-even stop $100 too high and exits winners as if they were break-evens. Every DCA ladder, every scale-in, every "adding to the dip" needs the recomputed average after each fill.
The psychological trap it exposes: averaging down always looks better on the average-entry number — each buy pulls it closer to the current price. The average improving is not the trade improving. The position is bigger, the total at risk is larger, and the coin still has to actually turn around.