How averaging works
A DCA bot (from Dollar-Cost Averaging — averaging the entry price) opens a position at market, buys more as price moves against it, and closes the whole position with a single Take-Profit measured from the average price. Then the cycle repeats.
What it is
The idea is simple: if price falls after the entry (for Long), the bot does not wait for a return to the first price — it buys cheaper. The average entry price goes down, so to end in profit the price only needs to come back to the average plus a small profit percentage, not to the first entry.
One cycle looks like this:
- The first entry is made at the current market price.
- Below it (for Long) the bot places limit averaging orders: each next one is a step further away and for a larger amount (amount multiplier). A set number of "active" orders is kept on the exchange, the others wait in a queue and are added as fills happen.
- Right after the first entry, a Take-Profit and a Stop-Loss for the whole position appear on the exchange. TP is measured from the actual average entry price.
- After every averaging buy the TP is cancelled and placed again from the new average (the order number on the exchange changes — that is normal). The SL volume is adjusted, and with the "from average" baseline its price moves too.
- Price came back — TP fired, unfilled averaging orders were cancelled, the SL was removed. The bot waits out the cooldown and starts a new cycle.
If the Stop-Loss fires instead of the TP, the cycle also ends, and a new one starts after the cooldown — but the bot counts consecutive stops and will stop itself if there are too many (see Protections).
For Short everything is mirrored: entry by selling, averaging above, TP below. Short is available on futures only.
Where it is in the bot
Main menu → 📉 DCA Bots. On the first visit the bot shows four onboarding screens (buttons ➡️ Next / ⏭️ Skip): “📚 Welcome to DCA Bots!” → “⚙️ How DCA Bot Works” → “⚠️ DCA Bot Risks” → “🚀 Ready! You can create your first DCA bot.” After that — ➕ Create DCA Bot (see Creating a DCA bot step by step).
Example with numbers
Long, preset ⚖️ Standard: amount multiplier 1.5, step between averaging orders 1 %, Take-Profit 1.5 %. Order amounts here are illustrative — the bot calculates the base order itself from the cycle amount and shows it in the profit calculator.
| Order | Price | Amount | Coins bought |
|---|---|---|---|
| First entry (at market) | 100.00 | 100 USDT | 1.0000 |
| Averaging 1 (−1 %) | 99.00 | 150 USDT | 1.5152 |
| Averaging 2 (another −1 %) | 98.00 | 225 USDT | 2.2959 |
| Total | — | 475 USDT | 4.8111 |
Average price = 475 / 4.8111 ≈ 98.73.
Take-Profit = 98.73 × 1.015 ≈ 100.21. The price only has to rise slightly above the first entry, and the whole position closes with a profit of 1.5 % of the invested 475 USDT, that is ≈ 7.1 USDT before fees. Without averaging, the same +1.5 % would require the price to reach 101.50.
The other side of it: if price keeps falling, the entire cycle amount ends up in the position. The profit calculator says exactly that: “⚠️ Max risk: entire cycle amount on heavy dump”.
What to keep in mind
- A long trend against the position locks up your funds — that is why the bot has a Stop-Loss and protection against consecutive stops.
- Leverage increases risk. On the risk screen the bot recommends moderate leverage (1-3x) and proven pairs (BTC, ETH).
- It is better to start with the 🛡️ Conservative preset and a small amount — that is the bot's own advice.
- Not enough balance for the next averaging order is not an error: the bot waits, the skipped order is retried on the next fill, and the TP stays in place.