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The DCA strategy

What is DCA?

DCA (or “Dollar Cost Averaging”) is the practice of investing into a currency at preset intervals to reduce the average entry price of a trade over time and mitigate risk.

For example, when you enter a trade at once (all-in) you run the risk of purchasing on the market’s top only to see the price drop and end up hitting your stop-loss.

However, if you DCA, you can divide your investment into smaller pieces and buy the asset at various points over time at different prices, thereby getting a better average price for your position and greatly reducing risks.

How does DCA work with Hyndor?

In the following picture you can find a flowchart of how a DCA bot would act with the following settings configuration:

  • Entry Strategy: Instant
  • Max Trades: 5
  • Perc Open: 2%
  • Perc Close: 2%

The price of the market that is traded, is 100 USD at the time of the initial order.

DCA Strategy

Updated on October 11, 2021

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