DCA Configuration

DCA (Dollar Cost Averaging) automatically buys more tokens when price drops below your average purchase price, lowering your average cost basis. This guide explains how to configure DCA settings for your trading agent.

Overview

DCA configuration consists of four main settings:

1. Enable/Disable - Turn DCA on or off
2. DCA Mode - How many DCA levels and when they trigger
3. Cooldown - Minimum time between DCA purchases
4. Max DCA Count - Maximum number of DCAs per position

Access DCA configuration in Agent Configuration > Trading Strategy > DCA tab.

DCA configuration tab showing enable toggle, mode selector, cooldown, and max count

What is DCA?

DCA is the inverse of stop loss:

How it works:

• When price drops below your average purchase price
• Agent automatically buys more tokens at the lower price
• Average purchase price decreases (weighted average)
• Position becomes profitable at a lower recovery price

Example:

• Purchase: 1 SOL at $1.00 = 1000 tokens
• Price drops to $0.80 → DCA buys 0.75 SOL more = 937.5 tokens
• New average: $0.903 per token (lower than original $1.00)
• Recovery to $1.00 now equals 10.7% profit (vs 0% without DCA)

Enabling DCA

The DCA toggle enables or disables automatic averaging down:

When enabled:

• Agent monitors price drops from average purchase price
• Triggers DCA purchases at configured drop levels
• Automatically buys more to lower cost basis
• Respects cooldown and max count limits

When disabled:

• No automatic purchases on price drops
• Manual purchase only
• Position maintains original purchase price

DCA Modes

DCA modes define when to trigger DCA and how much to buy. Choose a mode based on your conviction level and risk tolerance.

Mode Selection

Four modes are available:

Select your mode using the mode selector in the DCA tab. Each mode displays a brief explanation when selected.

Mode selector showing all four DCA modes

Mode Details

Cooldown Period

The cooldown period is the minimum time between DCA purchases:

How it works:

• After a DCA purchase, the cooldown timer starts
• Next DCA cannot trigger until cooldown expires
• Prevents rapid-fire DCAs during volatile price swings
• Gives price time to stabilize between buys

Example:

• Cooldown: 30 seconds
• 1st DCA executes at $0.80
• Price drops further to $0.75 within 10 seconds
• 2nd DCA waits until 30 seconds have passed since 1st DCA

Best practices:

• 10-30 seconds: For highly volatile tokens with rapid price swings
• 60-300 seconds: For moderate volatility, allows price stabilization
• 600+ seconds: For conservative approach, very patient waiting

Max DCA Count

The max DCA count limits the maximum number of DCA purchases per position:

How it works:

• Each position can have up to this many DCA purchases
• After max count is reached, no more DCAs for that position
• Prevents unlimited buying into a falling knife
• Protects capital from excessive exposure

Example:

• Max DCA Count: 3
• Initial purchase triggers first position
• 1st DCA executes (count = 1)
• 2nd DCA executes (count = 2)
• 3rd DCA executes (count = 3)
• Further price drops do not trigger more DCAs (max reached)

Best practices:

• 1-2 DCAs: Conservative, limits capital exposure
• 3 DCAs: Balanced (default), good for most traders
• 4-6 DCAs: Aggressive, requires high conviction and capital
• 7-10 DCAs: Very aggressive, only for extremely high-conviction plays

How DCA Works

Weighted Average Price

After each DCA purchase, your average purchase price becomes a weighted average:

newAveragePrice = totalInvestedSOL / totalTokens

Example Calculation:

• Initial: 1 SOL buys 1000 tokens at $0.001 SOL/token
• 1st DCA: 0.75 SOL buys 937.5 tokens at $0.0008 SOL/token
• New average: (1 + 0.75) SOL ÷ (1000 + 937.5) tokens = $0.000903 SOL/token

Important: Each DCA buy updates the average price, so subsequent DCA levels are measured from the new average (not the original purchase price).

DCA Evaluation Process

DCA is evaluated on every price update (same as stop loss):

1. Check if enabled - DCA must be enabled in agent config
2. Check cooldown - Verify minimum time since last DCA has passed
3. Check max count - Ensure not exceeded max DCAs for this position
4. Calculate drop - dropPercent = ((currentPrice - avgPrice) / avgPrice) × 100
5. Find level - Match drop to next unused DCA level (based on dcaCount)
6. Trigger buy - Execute DCA purchase if all conditions met

DCA vs Stop Loss Interaction

DCA and stop loss work independently:

• DCA: Buys more when price drops (up to limits)
• Stop Loss: Sells if price drops too far

You can use both together:

• DCA lowers cost basis on small drops
• Stop loss limits losses on large drops
• Combined strategy: Average down with DCA, cut losses with stop loss

Custom Mode Configuration

When using Custom mode, you must manually configure DCA levels.

DCA Levels Editor

The DCA levels editor allows you to add, edit, and remove custom DCA levels:

Custom mode DCA levels editor showing manual level configuration

Adding Levels

Each level requires two values:

How it works:

• Levels are evaluated sequentially based on position's DCA count
• 1st DCA uses first level, 2nd DCA uses second level, etc.
• Each DCA is measured from the current average price (updated after each DCA)

Level Requirements

Custom mode has specific requirements:

Validation:

• System validates levels are sorted correctly
• System validates drop percent is negative
• Invalid configurations prevent saving

Example Custom Configuration

Strategy: Moderate averaging with custom thresholds.

Configuration:

Level 1: Drop -15%, Buy 50%  → At -15% drop, buy 50% more
Level 2: Drop -30%, Buy 100% → At -30% drop, buy 100% more
Level 3: Drop -45%, Buy 75%  → At -45% drop, buy 75% more

Behavior:

• Price drops 15% → 1st DCA buys 50% more
• Average price updates, price drops another 15% from new average → 2nd DCA buys 100% more
• Average price updates, price drops another 15% from new average → 3rd DCA buys 75% more

Configuration Best Practices

Choosing a Mode

Recommendation: Start with Moderate mode - it's balanced and works well for most traders.

Setting Cooldown

Recommendation: Start with 30 seconds (default). Adjust based on token volatility.

Setting Max DCA Count

Recommendation: Start with 3 (default). Only increase if you have strong conviction and sufficient capital.

Risk Management

Important considerations:

• Monitor positions - Don't blindly average down into losses
• Use with stop loss - DCA lowers cost, stop loss limits downside
• Sufficient capital - Ensure you can afford multiple DCA purchases
• Strong conviction - Only use DCA on tokens you believe will recover

When to avoid DCA:

• Weak conviction in token recovery
• Limited capital for multiple buys
• Scam or dead tokens (don't average down into these)
• Continuous decline (token may not recover)

Common Questions