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Anderson DCA Strategy
So how does ANDERSON-DCA Strategy works?
You first need to setup your tier triggers, you can list as many as you want. We will use the following as an example for DCA.properties configuration
enabled = true
max_cost = 0
max_buy_times = 5
buy_strategy = ANDERSON
buy_style = DOUBLEDOWN
buy_trigger_1 = -3.5
buy_trigger_2 = -4.5
buy_trigger_3 = -4.5
buy_trigger_4 = -5.5
buy_trigger_5 = -5.5
sell_strategy = GAIN
sell_value = 0.8
max_buy_spread = 2
trailing_profit = 0.2
trailing_buy = 0.3
stop_loss_trigger = 0
pending_order_wait_time = 0
ignore_sell_only_mode = false
min_buy_balance = 0
We will use BTC-QTUM for this example
Let's say our bot purchased 0.36458333 units of QTUM at a price of 0.00192000 and the price starts to fall
Once the price falls below -3.5% (0.00185280) it will hit our first trigger as defined above and we will double our units
Since we have 0.36458333 units of QTUM, the bot proceeds and buy another 0.36458333 units at the current price
Let's say the price is currently 0.00185280.
After this purchase goes thru, we will have 0.72916666 units of QTUM
Average Buy price 0.00188640
For trigger 2 to kick in, the price would have to drop -4.5% (0.00180151) of our latest average price buy (0.00188640)
The bot again will double our units
Since we have 0.72916666 units of QTUM, the bot will proceed and buy another 0.72916666 units at the current price
Let's say the price is currently 0.00180151
After this purchase goes thru, we will have 1.45833332 units of QTUM
Average Buy price 0.00184396
For trigger 3 to kick in, the price would have to drop -4.5% (0.00176098) of our latest average price buy (0.00184396)
The bot again will double our units
Since we have 1.45833332 units of QTUM, the bot will proceed and buy another 1.45833332 units at the current price
Let's say the price is currently 0.00176098
After this purchase goes thru, we will have 2.91666664 units of QTUM
Average Buy price 0.00180247
For trigger 4 to kick in, the price would have to drop -5.5% (0.00170333) of our latest average price (0.00180247)
The bot again will double our units
Since we have 2.91666664 units of QTUM, the bot will proceed and buy another 2.91666664 units at the current price
Let's say the price is currently 0.00170333
After this purchase goes thru, we will have 5.83333328 units of QTUM
Average Buy price 0.00175290
For trigger 5 to kick in, the price would have to drop -5.5% (0.00165649) of our latest average price (0.00175290)
The bot again will double our units
Since we have 5.83333328 units of QTUM, the bot will proceed and buy another 5.83333328 units at the current price
Let's say the price is currently 0.00165649
After this purchase goes thru, we will have 11.66666656 units of QTUM
Average Buy price 0.00170469
If the pair does 5 DCA buys, it means that the original price we bought 0.00192000 has fallen around 14% since we bought If we hadn’t done any DCA buy, we would have to wait for this pair to gain those 14% back in order to break even, that might take a long time
While with DCA, our new average price would be 0.00170469, that means that with a little spike in price 3-4% we would be able to sell our “bag
WARNING
To use DCA you have to adjust your initial ALL_max_cost on pair files
Remember that each time ANDEERSON DCA makes a buy it will double your current units
That means it will use a lot of BTC, therefore, you MUST consider usin a low ALL_max_cost
Example
If your max cost is:
ALL_max_cost = 0.0007
If you have to DCA 5 times, you will have spent total around 0.022 BTC
A simple and safe math you can do is
1 DCA = initial trade = Total BTC to be used
2 DCA = initial trade x 2 = Total BTC to be used
3 DCA = initial trade x 4 = Total BTC to be used
4 DCA = initial trade x 8 = Total BTC to be used
5 DCA = initial trade x 16 = Total BTC to be used
6 DCA = initial trade x 32 = Total BTC to be used
7 DCA = initial trade x 64 = Total BTC to be used