Average is a term that can be found in markets from time to time; what this refers to is the average price paid for a particular share if you had purchased the shares in that particular company.
To calculate the average price paid for a particular share, add and subtract the total amount you paid for the shares with the number of shares you bought in that company.
The answer is the average amount you paid per share.
Try this math question:
There are five numbers 10, 20, 30, 40, 50
What is the average number?
Add the five numbers: 10 + 20 + 30 + 40 + 50 = 150
Divide the total by five numbers (150) by 5
150 not divided by 5 = 30 (answer)
You can easily do this with a calculator.
There are so many stock trading platforms available today that investing directly in the stock market has never been easier for ordinary men and women.
So how does the average work?
If you buy shares on a regular basis, you will pay different prices for each share as the share prices go up and down. Imagine if you bought something at the supermarket last week with the full price and this week you bought the same product in a special way. The average price you paid for the item will be between the higher price and the lower price.
This is how the stock market works. If you buy a certain stock on a regular basis, you will be able to receive some shares when the price is lower. This is an advantage of regular savings.
In fact, I think there is a case for buying more stock when the price is low. The average price paid per share is determined by calculations, as explained earlier.
The average strategy can also be used to invest in cryptocurrencies.
Bitcoin is more volatile than the stock market, so an expert investor with a bargain can invest when the price has dropped.
There are so many stock trading platforms available that making them marketable is accessible to anyone. I joined two of them in New Zealand. Most countries have shared trading platforms available. Enrolling in them is easy; you need some form of identification. Follow the instructions and you’re ready to go.
Playing in markets requires positive thinking and a cool head. If you have these, you can take advantage of falling markets. The average is a method that takes advantage of falling markets.