If you do not want to think about timing the bottom, this is your strategy. Buy a little, regularly, forever - DCA turns volatility from a stress source into a feature, because every dip is just a cheaper entry on your next scheduled buy.
How it works
DCA removes the pressure of market timing by automatically spreading purchases across fixed intervals. Instead of trying to catch the lowest price, the strategy buys consistently through ups and downs, smoothing your average entry and building a position with discipline.
Key Features
Strategy profile
A snapshot of how this strategy behaves and who it suits, not a forecast of returns.
These are designer assessments of strategy character, not user-specific performance figures.
DCA underperforms a lump-sum buy in roughly 60% of historical periods, because markets trend up over time and front-loading capital captures more compounding. The point of DCA is psychology, not raw alpha. It is the strategy you will actually stick with through a 70% drawdown - and a cost-basis win looks meaningless if you panic-sold halfway in.
Frequently Asked Questions
Quick glossary
Definitions for the trading terms used on this page.
- Backtest
- A simulation of how a strategy would have performed on historical price data. Past results never guarantee future returns - markets change.
- Slippage
- The difference between the price you expect and the price you actually get when an order fills. Worse on illiquid pairs and during fast markets.
- Spread
- The gap between the best buy price (bid) and the best sell price (ask). Tight spreads = liquid market, wider spreads = more cost per round trip.
- Stop-loss
- An automatic exit order that closes a losing position when price hits a chosen threshold. Caps how much one bad trade can hurt you.
- Take-profit
- An automatic exit order that closes a winning position once price reaches a chosen target. Locks in gains without relying on you to watch the chart.
- Volatility
- How sharply price moves. High volatility = bigger swings in both directions, which means more opportunity but also more drawdown risk.
