How to Use Dollar cost avg (DCA) in Spot Trading Strategy

Double Up (DU) is a Gunbot feature to automatically average down assets, bringing down the average cost per unit when prices drop after a regular buy order.

By bringing the average price per unit down, the price to exit the trade profitably gets lower. Of course, the obvious risk of averaging down is investing more in units that already dropped in price. Use this feature carefully.

tip

Use the DU guestimator sheet to simulate your DU settings.

Feel free to make a copy of the file. Thanks Trashdog01!

How DCA works

Below is an example of using Double up. The relevant settings used in the example would be:

• DU_METHOD set to HIGHBB. With this method each DU buy is triggered when the upper Bollinger Band crosses down the last buy price.
• DOUBLE_UP_CAP set to 1. Each DU buy is for 1:1 the amount of quote units already owned.
• DU_CAP_COUNT set to 2. A maximum of two DU buys are allowed.
• DU_BUYDOWN set to 1. The minimum required price difference for a DU buy compared to the buy price of the previous order.

Note that this example is kept simple intentionally, the amounts do not reflect real trades.

Using the example above: this is an overview of the buy orders made - notice how the average price per unit moves down after each DU buy:

	Units	Price per unit	Invested (cumulative)	Avg Price per Unit
Buy	100	12.500	1.250.000	12500
DU Buy 1	100	10.800	2.330.000	11650
DU Buy 2	200	8.090	3.948.000	9870

The resulting sell order would have profitably sold all available units at a much lower price than the initial buy order:

	Units	Price per unit	Proceeds
Sell	400	10.000	4.000.000

Configurable options for averaging down are:

• Buydown: A minimum price difference between the last buy and next DU buy. Regardless which DU method is picked, buydown must be reached for a DU buy.
• DU method: HIGHBB as shown above, RSI where DU buys are only placed within a configurable RSI range, and a numerical value defining a percentage price drop compared to the last bought price.
• Ratio: Defines how much extra quote units are bought for each DU buy.
• Frequency: How many DU buy orders are allowed.
• Trailing: DU buy orders can optionally use trailing.

danger

Double Up is a feature that allows you to invest significant amounts of your base currency. It's important to be cautious when setting the ratio and frequency, and to ensure that you have sufficient available funds.

DCA settings

Label	Config Parameter	Default Value	Detailed Description
Double up enabled	DOUBLE_UP	false	Enables Dollar Cost Averaging (DCA), a strategy used to reduce the average buying price of a cryptocurrency by purchasing additional units at lower prices.
DU cap	DOUBLE_UP_CAP	1	Sets the ratio of the quote currency used for each DCA order relative to your existing holdings, helping to determine the scale of your DCA efforts. For example, a setting of 1 means that each DCA order will match the amount of quote currency you currently hold, potentially doubling the investment to lower the average cost. It's advisable to set this high enough to significantly impact your average price but ensure it does not exceed your available balance.
DU cap count	DU_CAP_COUNT	0	Limits the maximum number of DCA orders that can be executed. This parameter helps control the extent of your DCA strategy and manage risk by capping the total number of times you can average down on a declining asset.
DU buydown	DU_BUYDOWN	2	Determines the minimum price drop (in percentage) from the last purchase that must occur before placing another DCA order. A lower percentage can trigger more frequent buys, which may lead to a quicker reduction in the average cost but at the risk of using up more capital if the asset continues to decline.
DU method	DU_METHOD	HIGHBB	Defines the strategy to trigger additional DCA orders. HIGHBB places orders when the upper Bollinger Band falls below the last purchase price; RSI triggers orders based on a specific RSI level; a numerical method places orders based on a set percentage below the last purchase price. This flexibility allows you to tailor the DCA triggers to different market conditions or personal risk preferences.
DU RSI buy	RSI_DU_BUY	30	Specifies the RSI threshold to initiate a DCA buy when using the RSI method. An RSI below this level indicates an oversold condition, suggesting a potentially advantageous point for averaging down. This setting helps automate buying at perceived low points based on RSI, which can be crucial in volatile markets.

Overview of effects on different order types

Config Parameter	Affected Order Types	Not Affected Order Types
DOUBLE_UP	DCA buy	Strategy buy, Strategy sell, Close, RT sell, Stop limit, RT buyback, RT buy
DU Method	DCA buy	Strategy buy, Strategy sell, Close, RT sell, Stop limit, RT buyback, RT buy
Double Up Cap	DCA buy	Strategy buy, Strategy sell, Close, RT sell, Stop limit, RT buyback, RT buy
DU Cap Count	DCA buy	Strategy buy, Strategy sell, Close, RT sell, Stop limit, RT buyback, RT buy
DU Buydown	DCA buy	Strategy buy, Strategy sell, Close, RT sell, Stop limit, RT buyback, RT buy
RSI DU Buy	DCA buy	Strategy buy, Strategy sell, Close, RT sell, Stop limit, RT buyback, RT buy
Trail Me DU	DCA buy	Strategy buy, Strategy sell, Close, RT sell, Stop limit, RT buyback, RT buy
Trail Me Buy Range	Strategy buy, RT Buy, DCA buy	Strategy sell, Close, Stop limit, RT sell, RT buyback