Dollar-cost averaging (DCA) is an investment (buying) strategy that divides the total amount to be invested across purchases in order to lower the purchasing cost and reduce the impact of volatility on the overall investment.

A basic DCA strategy can be set up to purchase in accordance with predetermined time intervals, regardless of the price change (daily, weekly, monthly, etc.)

You have $3,000 to invest.

The current price is $22.

If you decided to invest all of your money at the beginning, you would have bought 136.36 coins\contracts at a price of $22 per unit ($22 X 136.36 = $3,000).

In order to mitigate your risk, you decide to use a DCA strategy and invest $500 each month for 6 months (a total of $3,000) and the prices of each entry are $22, $15, $12, $25, $20 and $18.

You will buy 160.711 coins\contracts at an average price of $18.667 (About 15% less than the price you would have paid for purchasing all in a one-time investment).

Here’s a comparison between the two approaches:

More advanced strategies, such as Cornix DCA smart bots, will combine more variables, such as investing more as the price decreases and selling when the price increases.

Cornix smart DCA Bots will not buy in accordance with pre-defined time intervals but will buy and sell based on advanced multiple optional configurations, designed to get the maximum out of the market.

Cornix smart DCA bots will start buying at market price and then will continue purchasing as the price decreases. The bot will sell at a profit when the price increases, or at a loss if the stop-loss is reached, and will start a new trading cycle every time a trade is closed (reached take profit or stop-loss).

Using the same numbers as in the example above:

The bot will purchase at a market price of $22 and will continue to purchase as long as the price decreases (below the market entry price), in our example at $15 and $12, and when the price increases to $25 the bot will sell.

A new purchase will start at $25, then continues as the price decreases to $20, and $18, and the bot will sell when the price increases again.

As long as a DCA bot is active, it will always have one open trade (excluding cooldown time). Each time a trade is closed (hits a take-profit or stop-loss target), a new trade will be created automatically with the bot's configurations (unless configured otherwise on the advanced settings).

You can easily Copy Public DCA Bots created by others and let them do the heavy lifting for you or you can Create your own DCA Bot (for advanced traders).