Practical Guide: Frequently Asked Questions about DCA Strategy

DCA, a versatile bottom-fishing tool, is simple and easy to operate. Below, AICoin will help you understand the possible issues when using the DCA strategy.

1. What is DCA and what is it used for?

DCA, short for Dollar Cost Averaging, also known as the Martingale strategy, is an automated, phased, and low-point bottom-fishing strategy that helps investors avoid buying at high points and better seize opportunities.

For example, if investor A holds 6000 USDT and buys 0.15 BTC at a price of $40,000, and wants to bear the risk of the price falling after the purchase. If he uses the DCA strategy robot for periodic investment with the following settings:

Investment currency: BTC
Additional position frequency: Add a position when the price falls by 1%, up to 5 times
Fixed total investment amount: Both the initial order and additional position amount are 1,000 USDT

The specific details of the 6 purchases are as follows:

Practical Guide: Summary of Common Issues with DCA Strategy_aicoin_Figure 1

BTC average investment price: (40,000+39,600+39,204+38,812+38,424+38,040)/5 = 39,013 USDT

After 6 purchases, investor A purchased approximately 0.1538 BTC at an average price of $39,013, which is more than a one-time purchase, with a lower average price. The operation is fully executed by the program, and there is no need to worry about floating losses caused by market downturns.

2. Where can you run the DCA strategy for all currencies?

You can operate it on the AICoin PC end, which is fully automated.

Install/update the PC end immediately (use a VPN to open the link): https://www.aicoin.com/download

Note: Authorization is required before running, and supported platforms include Ouyi OKX, Binance, Bitget, Gate, HTX, and Pionex.

3. Will the strategy pause if the computer goes to sleep or is turned off?

The strategy robot only runs on the local software. If the computer goes to sleep, the robot will pause, so it is necessary to ensure that the AICoin client runs normally and the network is unobstructed. This method is safer for APIKEY and more discreet for placing orders.

4. What kind of market is DCA suitable for?

AICoin's DCA for all currencies not only supports contract and spot trading types, but also allows strategies to be created according to sectors, making it profitable in both bull and bear markets.

5. How long does it take to see profits from running the strategy?

Profits can be generated after completing one buying and selling cycle, with the fastest within a day, and generally visible within 3 days.

6. Is there a fee for running the strategy?

It is free to use, with only the trading fees charged by the exchange. The displayed profits have already deducted the exchange fees (net profit).

7. Is there a risk of loss? Is the accuracy high? Can profits be guaranteed? Is there compensation for losses?

All investments carry risks, and there is no strategy that guarantees 100% profit. Investment should be cautious, and it is recommended to evaluate based on one's actual situation.

AICoin does not guarantee that the service will definitely meet the user's requirements, nor does it guarantee that the service will not be interrupted. It does not guarantee the timeliness, security, or accuracy of the service. AICoin does not assume any responsibility for network service interruptions, data loss, data damage, or other defects caused by various reasons.

Special note: Past backtesting profits do not guarantee future profits!!!

8. Which is better, contract or spot trading, and what are the differences?

AICoin's DCA for all currencies supports both contract and spot trading types, so you can choose according to your needs. Contract DCA has leverage and position modes in addition to the basic parameters, which are mostly the same as spot DCA.

9. How much should you invest?

There is usually a minimum investment amount prompt. If you are not familiar with the situation in the early stage, you can invest less than 100. It is recommended to evaluate based on your actual situation.

10. How many strategies can be run simultaneously at most?

Currently, there is no limit on the number of strategies, but it is important to note the frequency limit of the exchange. Generally, one APIKEY should not exceed 10 robots.

11. What is the logic of running the strategy?

Multiple purchases and one sale, averaging the cost, and using market oscillations to profit from reversals, suitable for both bull and bear market bi-directional trading.

12. What are the advantages compared to 3commas?

It is free to use, supports all currencies, only requires an investment amount, and does not require an understanding of strategy parameters. The robot runs locally, and APIKEY is secure.

For details, please refer to: 8 Reasons to Use AICoin's DCA for All Currencies

13. Will there be alerts for abnormal strategy operation?

Yes, there will be pop-up alerts and email notifications.

14. Is it difficult to stop the strategy?

You can stop and terminate the strategy at any time and withdraw the funds by simply clicking the terminate button to close the position of the strategy robot.

15. Is there a long and short DCA?

You can manually create a long and short DCA strategy.

16. Can stop-loss be set?

You can set a stop-loss for individual currencies or for the total investment. For specific details, please refer to the strategy parameters.

17. Will contract DCA be liquidated?

It is possible, as there is always a risk of liquidation in contracts. To prevent the risk of liquidation, it is recommended to use low leverage and increase sufficient margin.

18. How are the parameters set?

It is not supported. We have already conducted backtesting through big data and displayed the monthly profits of each strategy in the strategy plaza. Interested users can also use the custom indicator backtesting function for backtesting.

19. Should DCA be triggered by TD or RSI?

It is recommended to use the default setting, as the backtesting data is based on the default triggering method.

20. Can the K-line period for TD/RSI indicator triggering in all-currency DCA be modified?

Currently not supported.

21. Does all-currency DCA support strategy backtesting?

22. Are there any drawbacks to DCA?

Spot DCA may miss the opportunity for upward movement because it is a bottom-fishing strategy. During an upward trend, the strategy will not trigger the buy program, but this drawback can be compensated for by using contract DCA.

For more questions about all-currency DCA, please feel free to consult AICoin customer service in the APP or PC group chat: Customer Service Yingying, Customer Service KK

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