¶ How do I DCA based on my current holding?
Before you dive into the following topic, please read the basics about Dollar-cost averaging.
Once you're all set, let's take a look at the underlying assets and how we transfer them properly into ProfitTrailer.
¶ Introduction.
- For this topic, we will dive into DCA buy percentage. Here we make entries based on the % of the current holding in order to DCA on.
More information on this page.
¶ DCA buy percentage.
DCA_buy_percentage defines the percentage of coins purchased when making a DCA buy in relation to overall coins owned.
The set value is the % of the current holding to be purchased at the next DCA level.
For example:
DEFAULT_DCA_buy_percentage = 20 (%)
- This purchase will buy 20% of the asset in relation to your initial buy cost or current holding. That means if you have 100 USDT worth of ADA (= 200 ADA), every DCA entry will cost you 20% of your current holding which is in this example 40 ADA (because 20% of 200 ADA = 40 ADA).
- Keep in mind that this will build up over time if you decide to DCA more than once. In our example we now own a total amount of 240 ADA since we started with 200 ADA and bought 20% of it once... If you were to take another DCA entry with a buy percentage of 20%, this would now cost you 48 ADA, giving us 288 ADA in total.
You can also use multiple DCA entries to build up and diversify your entry moments.
DEFAULT_DCA_buy_percentage_1 = 10 (%)
DEFAULT_DCA_buy_percentage_2 = 20 (%)
DEFAULT_DCA_buy_percentage_3 = 30 (%)
- Here we will start our first purchase with only 10% of our current holding or our first initial cost, building up towards 30% at the third entry. You can use unlimited entries and any percentage possible (0.01%, 20%, 100%, 200%...).
¶ Safety.
- Keep in mind to practice safety when using DCA. Dollar-cost averaging can be both a blessing or a curse because exposing you too much can put you in a vulnerable place when the market decides to make a turn.