Dollar-Cost-Averaging (DCA) bots are automated trading bots that allow you to automatically buy coins based on a preset investment amount and time intervals within a specific period, thereby reducing the influence of market volatility.
Contents
What Is a DCA Trading Bot
Why You Should Invest InKuCoin's DCA Trading Bot
How to use DCA Bot
What Is a DCA Trading Bot?
Dollar-Cost Averaging (DCA) is an investment strategy that allows the investor to buy the same dollar amount of investment at regular intervals. The purchases occur regularly at specified timeframes, regardless of the asset's price at that moment.
DCA is advantageous to anyone who is bullish on a good asset. It reduces the influence of market volatility and allows you to maintain a cost price similar to the market average. DCA trading is suitable for the following investing: HODLing, long-term investment, and smile curving.
According to the data, 90% of traders will get better returns if they use DCA instead of manually investing their funds.
Here are the parameters for DCA Trading Bot:
Investment Frequency: This is how often you want to invest in a chosen crypto. The first investment will be made soon after a DCA bot is created. Regardless of the amount, a longer frequency fits a longer plan. Bybit provides various time interval settings, from a few hours to a few weeks.
|
|
Hour(s) |
Day |
Week(s) |
|
Time Interval |
1,4,8,12 |
1,2,3,4 |
1,2 |
Date of First Investment: This is the time when you want to make your first investment. You can choose to invest now, or choose to invest anytime within today.
Amount per Investment: This is the amount used to buy the currency for each period.
Max. investment(Optional): This is the maximum amount you wish to invest in this crypto.
Advantages of Dollar Cost Averaging
The DCA strategy helps to lower the risk of investing during choppy markets. Based on your market performance when you make a purchase, using DCA can reduce your losses — or even help to increase your profits. It can prevent buying at high prices and sustaining losses for a long time. But as the risk decreases, so will the upside benefits. However, if you're bullish on an asset and have a long-term time frame to hold it, it's worth considering DCA.
Now, we'll take a look at why you can take advantage of KuCoin's DCA Trading Bot to help you manage your risk and reduce your entry cost.
Why You Should Invest In KuCoin's DCA Trading Bot
1. Simple to Set Up
The DCA bot is designed for anyone to use. Its user interface is straightforward, and beginning traders can use our Auto-Fill function to easily create a trading bot with preset parameters or customized parameters.
2. Various Crypto Pairs
Users can choose from a wide variety of cryptos, including BTC, ETH, KCS and more. Any new crypto listed in the Spot market can be invested in DCA bot for the first time. Head over to the Create page to view the full list of coins supported by the DCA bot.
3. No Costs to Run Bots
KuCoin users are allowed to use the DCA bot for free … at no cost. DCA bots incur no additional or hidden fees, and we only charge trading fees per trade, just like any other form of trading on other markets.
4. Removes Personal Emotions
As we know, it can be very emotional to trade every day, watching candles move up and down as prices fluctuate. KuCoin DCA bot does this automatically for you in a few easy clicks. By configuring some aspects as shown above, you'll be able to let the bot invest a specified amount at a regular period of your choice. This removes the emotional aspect of trading, as the bot manages your crypto.
5. Reduces Repetitive Work
With the current market conditions, more and more people are finding ways to simplify their investment process. Using the KuCoin DCA bot, users can automate their daily or weekly buys by ensuring that they have enough funds in their bot account.
6. Invest in Smaller Amounts
Instead of investing in large chunks, the DCA bot helps you to do so in small portions over a period of time. It's important to understand that DCA is a long-term strategy which takes advantage of volatile markets without risking capital. DCA can be an excellent solution for beginning investors, who may be easily discouraged by downturns. It also gives users the time to do deeper research while the DCA bot continues to invest for them.
7. DCA Is Proven to Beat Timing the Market
DCA helps users lower their costs without trying to buy the lowest price. Its hard for people to continuously guess the market tops and bottoms. Even if the market keeps going down, as long as one uses a DCA bot, the Net Value will eventually be higher than the original investment. The best practice of running a DCA bot is: Select your favorite assets, ensure there are enough funds, run the DCA bot, be patient.
How to use DCA Bot
At present, KuCoin DCA bot only supports the investment of USDT, so your KuCoin account needs to have enough USDT to successfully open DCA bot.
It is very simple to set the parameters of DCA bot.
First, choose a trading pair.
Second, set ‘Amount per Investment’ and ‘Amount per Investment’.
Third, choose ‘Investment Frequency’ and ‘Date of First Investment’.
Finally, tap ‘Create’，check and confirm the order confirmation, then tap ‘Confirm’ to run the bot.
KuCoin DCA trading bot is an efficient tool for managing the danger of investing too much money at once. DCA trading is passive and doesn't include any active management fees. It's great for people who want to earn income and can afford to add to their investment regularly. If you're looking for an easy way to buy crypto without stress, this bot is for you! Keen on beginning your DCA journey? Try out KuCoin DCA trading bots today.
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