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DCA stands for dollar-cost averaging. The DCA bot opens a position with a base order. If the price moves against you, it adds to the position with safety orders at preset levels, lowering your average entry price. When the price recovers by your take-profit target, measured from that average, the bot closes the whole position and starts a new round.

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How a round works

1

Base order

The bot opens the position with the base order, immediately or when the trigger price is reached.
2

Safety orders

Each time the price moves against you by the price deviation, the bot places the next safety order. Your average entry price improves with every fill.
3

Take profit

When the price moves in your favor by the take-profit percentage from the average entry, the bot closes the whole position.
4

Next round

After a short cooldown, a new round starts with a new base order.

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Parameters

Total investment = base order + all safety orders, including the effect of the size multiplier.

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Example

Buy-side DCA bot on ETH at $4,000:
  • Base order: $100
  • Safety order: $100, multiplier 1
  • Max safety orders: 2
  • Price deviation: 5%
  • Take profit: 3%
Take profit triggers at 3% above the average, about $3,907. The bot sells 0.0791 ETH for about $309, a profit of about $9 on the round before fees. Note that the price only had to recover to $3,907, still below the original $4,000 entry.

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Choosing settings

  • Tighter deviation and more safety orders fill more often and take profit sooner, but use up your budget faster in a deep drop.
  • Wider deviation, or a deviation multiplier above 1, keeps firepower for larger drops.
  • A size multiplier above 1 lowers the average entry much faster, but makes later orders much larger. Check the total investment before starting.
  • Make sure the total investment covers every safety order. If the bot runs out of safety orders, it simply holds the position until the take profit or stop loss is hit.
On a futures DCA bot, every safety order increases your position and moves your liquidation price. Check the liquidation price shown for the worst case, with all safety orders filled, before you start.