DCA (Dollar-Cost Averaging)

What is the DCA Strategy?

DCA (dollar-cost averaging) is a strategy where the bot lowers the average purchase price of an asset by buying more as the price drops. When the price recovers — the bot sells the entire position at a profit.

In simple terms: instead of buying once and waiting for growth, the bot buys more if the price has dropped. Thanks to this, the average purchase price becomes lower, and the price doesn’t need to return to the original level for profit.

How It Works in Practice

Let’s say the bot bought 1 BTC for $10,000.

The price dropped to $9,000 — the bot bought another 1 BTC.

Now the bot has 2 BTC, and the average purchase price is:

(10,000 + 9,000) / 2 = $9,500

The price rose to $9,700 — the bot sells both BTC.

Result:

• Spent: 10,000 + 9,000 = $19,000
• Received: 9,700 × 2 = $19,400
• Profit: $400

Without averaging, you would have had to wait for the price to return to $10,000. But with averaging, the bot earned already at $9,700.

Strategy Parameters

When creating a bot with a DCA strategy, you configure the following parameters:

1. Order Size

The amount of the first purchase. Can be specified in coins or in dollars.

Example in dollars: order size — 10 USDT. The bot will start a cycle by buying the asset for 10 USDT.

Example in coins: order size — 0.001 BTC. The bot will buy exactly 0.001 BTC.

2. Profit per Trade

The target profit at which the bot sells all accumulated position.

Example: profit — 0.5 USDT. The bot will sell all purchased coins once the total profit on the position reaches 0.5 USDT.

3. Step Between Buy Levels (%)

How many percent the price must drop for the bot to make the next purchase (averaging).

Example: step — 3%, initial price — $100.

• 1st purchase: $100
• 2nd purchase: $97 (3% drop)
• 3rd purchase: $94.09 (another 3% from $97)
• 4th purchase: $91.27 (another 3% from $94.09)

4. Step Multiplier

Increases the distance between buy levels with each subsequent order. This is needed so that during a major drop, the bot doesn’t spend the entire budget too quickly.

Example: initial step — 3%, multiplier — 1.5.

• 1st step: 3%
• 2nd step: 4.5% (3% × 1.5)
• 3rd step: 6.75% (4.5% × 1.5)

With an initial price of $100:

• 1st purchase: $100
• 2nd purchase: $97 (−3%)
• 3rd purchase: $92.64 (−4.5% from $97)
• 4th purchase: $86.38 (−6.75% from $92.64)

The stronger the drop — the greater the distance between purchases. The budget is spent more economically.

5. Volume Multiplier

Increases the amount of each subsequent purchase. The idea is to buy more at more favorable (lower) prices.

Example: first purchase — $10, multiplier — 1.5.

• 1st purchase: $10
• 2nd purchase: $15 ($10 × 1.5)
• 3rd purchase: $22.50 ($15 × 1.5)
• 4th purchase: $33.75 ($22.50 × 1.5)

At lower prices, the bot buys more — this further reduces the average price and speeds up reaching profit.

6. Maximum Number of Orders

How many times the bot will buy more of the asset as the price drops. More orders mean a larger budget is needed, but the bot can withstand a deeper drop.

Example: with 5 orders, the bot will make the first purchase and can buy 4 more times as the price continues to drop. With 10 orders — it can buy up to 9 more times, but more funds are needed on the balance.

7. Auto Cycle Reset

If this setting is enabled, the bot automatically starts a new buying cycle right after it sells the previous position at a profit.

The bot bought → averaged → sold at a profit → immediately started again. The cycle repeats without your involvement.

If the setting is disabled — after selling, the bot will stop and wait for your command.

8. Buy Range (optional)

You can limit the price range in which the bot will make purchases. The bot will only start working when the price is within this range.

Example: you only want to buy the asset if its price is between $90 and $110. The bot will not open positions if the price is above $110 or below $90.

Budget Table

When creating a bot with a DCA strategy, the app will show you a budget table — a detailed plan of all buy levels.

In the table, you will see:

This table helps you understand in advance:

• how much money you need on the exchange for the bot to complete all levels
• at what prices the bot will buy
• what the amount of each purchase will be

When is the DCA Strategy Suitable?

The DCA strategy works best under the following conditions:

Ideal conditions:

• Volatile market — the price fluctuates frequently, with short-term drops followed by recovery
• Promising asset — you believe the asset will grow in the long term, or at least not lose its value
• Short-term dips — the price drops temporarily and then recovers. The DCA bot earns best on these kinds of movements

Not suitable if:

• The asset is in a prolonged decline with no signs of recovery
• You have a limited budget insufficient to cover all averaging levels