The Dollar-Cost-Averaging (DCA) bots are automated trading bots to help traders build positions incrementally. Bybit EU’s DCA bots 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.
The DCA bots are based on the Dollar-Cost-Averaging strategy, which is an investment strategy that helps you average the price of your coins by investing in a certain number of them on a regular basis.
Since you’ll be investing at regular intervals, DCA bots are suitable for most investors. Especially if you are a:
- Long-term holder of coins
- Long-term investor, and you don't care much about short-term coin price fluctuations
- An investor who can’t keep an eye on the market all the time
How does the Bybit EU DCA bot work?
Bybit EU allows you to create a DCA bot with one coin or a portfolio of up to five coins. Let's see how the DCA bot works by using an example.
Before learning more about DCA trading, let's briefly understand some parameters of the DCA bot order page to make it easier for you to understand the following example.
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How to Get Started with DCA Trading on Bybit EU
Example 1
Suppose Trader A sets up a DCA bot with the following parameters:
- Currency: USDC
- Select Cryptocurrencies: BTC and ETH
- Investment Frequency: 1 week
- Total Fixed Investment Amount: 1,000 USDC
- BTC Fixed Investment Amount: 600 USDC
- ETH Fixed Investment Amount: 400 USDC
- Max. investment amount for DCA bot (Optional): 5,500 USDC
Assuming that Trader A invests for five weeks, according to the weekly investment frequency, Trader A automatically performs a total of five transactions. The specific details are as follows:
Accumulated Quantity for BTC
Accumulated Quantity for ETH
Please note that the system will automatically transfer the required amount of funds from your Bybit Funding account to the Trading Bot before each purchase.
During a five-week investment period, the average entry prices for both BTC and ETH can be calculated using the following formula:
Formula
Avg. Entry Price = Accumulated Purchased Value in Quote Token ÷ Accumulated Purchased Amount of Base Token
BTC Avg. Entry Price (USDC) = (600 × 5) ÷ 0.10645868
= 28,179.95 USDC
ETH Avg. Entry Price (USDC) = (400 × 5) ÷ 1.41245423
= 1,415.98 USDC
In this case, Trader A buys 0.10645868 BTC at an average price of 28,179.95 USDC, and simultaneously buys 1.41245423 ETH at an average price of 1,415.98 USDC.
Example 2
If Trader A does not invest in batches through the DCA bot and instead buys BTC and ETH in one go with 5,000 USDC in the first week, the entry price and purchase quantity are as follows:
- BTC Fixed Investment Amount: 3,000 USDC
- ETH Fixed Investment Amount: 2,000 USDC
We can see in this case that for the same investment amount, more BTC and ETH can be obtained by using DCA bot.
In the above example, Trader A has set a max. investment amount of 5,500 USDC. Since the remaining 500 USDC isn’t enough to initiate the sixth auto-purchase — that is, each single investment is 1,000 USDC — the DCA bot will automatically close after the fifth auto-purchase. At the same time, 0.10645868 BTC and 1.41245423 ETH in Trader A’s DCA Bot will be returned to his Funding Account.
Notes:
— If you do not set a Maximum Investment Amount and the available balance in your Funding Account is not enough for the next auto-purchase, you will receive an email and notification to remind you to deposit funds into your Funding Account. If you fail to deposit sufficient funds in time for the next auto-purchase, the DCA bot will be suspended. Once there are sufficient funds in the Funding Account, it will be activated again at the next auto-purchase time.
— The suspension of DCA bot due to insufficient funds will not automatically terminate it. If you want to terminate your DCA bot, please close it manually.