Spot DCA Main Parameters Explanation

1. Cryptocurrency Selection

Meaning: The underlying asset you want to trade with Spot DCA (BTC, ETH, altcoins, etc.).

Function: Determines overall bot risk, volatility space, and capital consumption speed.

Techniques: Prioritize high-liquidity, mainstream cryptocurrencies (high rebound probability, low crash risk); avoid low-liquidity coins or hard-to-control volatile coins (a sustained downtrend may result in total loss); Beginners are recommended to stick with large-cap coins like BTC, ETH, or XRP, which have moderate volatility and manageable capital requirements.

2. Condition for Adding Positions

Meaning: The logic that triggers position adding (e.g., price deviation amount/percentage, technical indicator signals).

Function: Determines bot averaging frequency and depth.

Commonly used techniques: add positions once for every 5%-10% decline; tighter approach means adding positions on smaller declines, with high frequency and fast capital consumption; looser approach means adding positions only on larger declines, with slower capital consumption but slower cost averaging.

3. Price Deviation

Meaning: Decline percentage relative to the last purchase price.

Function: Core parameter of averaging conditions, controlling averaging speed.

Technique: For mainstream coins, typically use 5%-8% intervals, while for altcoins this can be expanded to 8%-15%. Smaller percentages lead to frequent additions—good for ranging markets but create capital pressure. Larger percentages suit high-volatility coins by reducing unnecessary additions, but risk missing rebounds.

4. Buy Shares

Meaning: The total investment is divided into multiple portions for several rounds of adding positions.

Function: Control capital allocation rhythm, and prevents early capital depletion.

Technique: Coordinate with the Max DCA orders (for example, 5 DCA orders → split capital into 5 portions). Too few portions mean insufficient opportunities to average down costs. Too many portions result in individual purchase amounts being too small, making rebound gains less noticeable.

5. Position Addition

Meaning: Specific quantity or amount purchased each time averaging down.

Function: Directly affects cost reduction speed.

Technique: Typically, Averaging Amount = Previous Cycle Amount × Multiplier (refer to “Amount Multiplier”). The initial position shouldn’t be too large, as this creates enormous capital pressure in subsequent cycles.

6. Max DCA Orders

Meaning: Upper limit of averaging cycles allowed in the bot.

Function: Limit capital consumption to prevent extreme market conditions from draining all funds.

Technique: Beginners are advised 3-5 cycles (to control capital risk); well-funded traders can set 6-8 cycles (to cover larger declines); more cycles can handle greater drawdowns but tie up more capital.

7. TP Target Per Cycle

Meaning: How many percentage points above average cost price to close positions when prices rebound.

Function: Determines profit speed and profit magnitude.

Technique: Typical take-profit targets are 0.5%-1.5% for quick entries and exits. Lower percentages offer higher win rates but smaller per-trade profits. Higher percentages provide better returns but lower chances of successfully closing positions.

8. Investment Amount

Meaning: Total capital pool allocated to this Spot DCA bot.

Function: Limits maximum risk and maximum position size.

Technique: Keep at least 30%-50% of funds reserved for follow-up position additions. Too small an investment provides little room for error. Too large an investment creates pressure, particularly during one-way downtrends.

9. Amount Multiplier

Meaning: Multiple of each averaging amount relative to previous time (commonly 1.2-2.0).

Function: Determines cost averaging speed.

Technique: Higher multipliers enable faster cost averaging but consumes capital quickly with greater risk. Lower multipliers reduce capital pressure but need bigger price rebounds to reach breakeven.

10. Trigger Price

Meaning: Trigger point for next cycle averaging or take-profit.

Function: Real-time execution signal for bot operation.

Technique: Automated systems handle calculations in real-time, but manual trading needs pre-set orders. Avoid modifying trigger prices impulsively, as this will mess up your capital management plan.

11. Stop-Loss Percentage

Meaning: Maximum loss percentage triggering forced position closing.

Function: Prevents extreme markets from trapping all capital.

Technique: Most traders set stop-loss at 20%-50%, though some use no stop-loss (very risky). Stop-loss can preserve capital but may lock in losses. Without stop-loss, risk can escalate indefinitely.

12. Current Cycle

Meaning: Which averaging cycle is currently in progress.

Function: Real-time monitoring of capital consumption progress.

Technique: As the current cycle nears the maximum averaging limit, risk increases dramatically. Keep track of remaining averaging cycles to prevent running out of capital too early.

13. Completed Cycles

Meaning: Number of times bot successfully took profit and ended cycles.

Function: Measures the bot historical win rate and stability.

Techniques: The more completed cycles, the better the bot fits the current market. Consecutive failed rounds may indicate that market conditions have changed and continuation may no longer be suitable.

Key Insight: Parameter adjustment isn’t isolated—it’s a balance of capital management, market adaptation, and psychological tolerance.

Capital Management → Max DCA Orders, Amount Multiplier, Number of Buying, Investment Amount

Market Adaptation → Cryptocurrency Selection, Price Deviation, Take Profit Percentage

Psychological Tolerance → Stop Loss Percentage, Floating Loss, Cycle Execution

These parameter settings capture the essence of the bot—averaging down through increased buying on declines—while using controls like profit-taking and stop-losses to secure stable returns in ranging markets. Experienced investors with adequate capital can optimize these parameters to effectively recover losses and generate profits during market volatility or brief corrections. Nevertheless, rigorous risk management is essential to prevent liquidation during sustained downtrends.