DCA Bots
Available to Premium and Professional users
Last updated
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Available to Premium and Professional users
Last updated
Was this helpful?
DCA or commonly referred to as Dollar Cost Average, is a popular accumulation strategy which often spans a long period of time. For experienced traders, the market is known to take on a random "walk". It is absolutely hard to time the market. Hence, it is also near impossible to buy an asset at its lowest price within the window of opportunity.
One of the well proven method for accumulating an asset is the DCA strategy. Essentially, it aims to buy an asset periodically. The entry condition for DCA varies. The most common method is a Regular Savings Plan (RSP) model, popular within the traditional securities market. RSP is simply buying an asset at every fixed time interval such as the first day of the month.
You may allocate a fixed amount of fund to your DCA bot like how you would do it for the Simple and Advanced bots. Alternatively, you may also set a No Limit allocation. The DCA bot will keep using your capital until the capital in your crypto exchange wallet is insufficient to meet the current order. Upon encountering such a situation, the DCA bot will stop.
You must also set the amount of capital for each order which the DCA bot will use to buy the Asset.
CryptoHero offers the following entry conditions for DCA bots
Fixed Time Interval
Technical Indicators (like Simple and Advanced Bots)
Buy Down
Sell Up
This mode simply configures the bot to buy at every fixed time interval. You may configure the bot to run every day, once a week or on a particular day in a month.
This is similar to your Advanced bots' technical indicators (such as granular settings and 2 hour trading interval). In addition, you can also include the Martingale strategy. Please see below for an explanation regarding Martingale.
This method allows traders to accumulate or dispose of assets as the prices trend down or up respectively. Users can employ the Martingale strategy in this method as well.
The Martingale strategy is essentially doubling the size of each successive trade. The multiple may not be 2X but can be any multiples you set. The premise for this strategy is that all trends will eventually turn around - a bad market cannot be stay bad forever. And when then turnaround occurs, the last few trades (which would be the largest in size) will allow a trader to generate a profit much faster.
In CryptoHero's Martingale strategy, a trader can set XX% from last trade. For example, if XX = 10%, and if the bot makes 1000 USDT worth of purchase in the last trade, the next trade will be 1,100 USDT worth of purchase. If XX = 100%, the next trade would be 2,000 USDT worth of asset in size. The third trade would be 4,000 USDT in size.
If Martingale strategy is set, it will override the Per Order Amount value in the Trade Parameters tab.
Please note that the Martingale strategy can quickly deplete your capital!
