How to start a DCA bot?

What is a DCA trading bot?

  • A DCA (or “Dollar Cost Averaging”), the aim of the DCA trading strategy is to buy and sell smaller amounts of an investment over a set percentage to reduce the average order entry price.
  • DCA Bot can divide your investment or amount into smaller pieces and buy or sell the asset at various points over time at different prices, thereby getting a better average price for your position and greatly reducing your risks from the consequences of volatility.

DCA Bot in Laxya App.

DCA Bot Parameters :

  • Initial Price (%): The initial price shows the percentage of the current price to buy or sell the first order executed. If the percentage of the starting price is 0 (zero), then the first order will be executed at the market price.
  • Initial investment: Initial investment means how much investment should be made for the first order to be executed.
  • DCA Orders: DCA orders are used for averaging your buy or sell price and also indicate when to place other orders after the first order has been executed.
  • Take Profit: Set a profit target for your order using the take-profit function and ensure a profit to manage the risk.
  • Stop Loss: Stop Loss is an advanced order that is used by traders to prevent additional losses. When a specific price point is met, the order is triggered.
  • Take Profit Trailing: Take Profit Trailing gives the minimum take-profit price of buying order and the maximum price of a selling order.
  • Loop: If Loop is enabled, once the take-profit target is hit, the same DCA trading bot strategy will start automatically again.

How Does DCA Bot Work?

Let’s select the BTCUSDT pair and set these values

  • Firstly select an order side which is either “Buy or Sell”. we are selecting “Buy”.
  • Now enter the initial price percentage is 2 and an Initial investment of 100 USDT for example.
  • Then click on DCA Orders, we can place as many orders but we will arrange two orders in DCA Orders.

    1st DCA order
  • Enter the value 3 in buy % and 1 in times which means if the price of BTC still decreasing and if it was decreased by 3% of the buying price of my initial order then again I want to invest 100 USDT. If we want to 2 times your initial investment. for that, we should enter the value 2 times, so my investment is also changed to 200 USDT.

    2nd DCA order
  • Enter the value 5 in buy % and 2 in times which means if the price of BTC still decreasing and it was decreased by 5% of the buy price of my 1st DCA order then this time I want to invest 200 USDT in BTC again. after then click on Confirm button.

Take-Profit:

  • Enter the value 4 in Take-Profit %. This means we can make a profit of 4% of the average price.

Stop-Loss:

  • Enter the value 4 in Stop-Loss %. This means we can’t be lost more than 4% of the investment.

Let’s Create DCA Bot. Then let’s see how the DCA Bot will work.

At present the price of BTCUSDT is 35000 then it will go down to 2% so the Initial order will be executed at a price of 34300(35000-2%) and the Take profit trigger will be generated at 4% of the first order at price 35672(34300 + 4%).

  • Now the market can move in both directions. If the market price goes above 34300, the Take-Profit order will be executed at the price of 35672(34300 + 4%) so you will get the 4% Take-Profit of investment then DCA Bot will close.
  • If the market goes below 34300, the 1st DCA Order will be executed at 33271(34300 – 3%). So its average price will also change and its average price will be 33635.5((34300 + 33271) / 2) And the Take-Profit price will be 34981(33635.5 + 4%).

Similarly, the DCA Bot will be started, and if Take-profit order will be executed at their price that time DCA Bot will be closed.

After the DCA bot has been executed, We can also modify it in Active DCA Bot.

We can change the values of the initial price %, by clicking on the change button likewise, you also change the value of stop-loss, take-profit, and trailing. We can also Add or Remove DCA orders.

DCA Order: If you don’t want the remaining DCA orders will be executed then just disable this button.

Loop: We can disable the loop by disabling this button.

Break-even: if want that your bot will close at your average price then enable this. In another word, your take-profit price will be set at your average price.

Also, We can see the list of your executed orders in the Completed Orders tab and also see the logs of the DCA bot.