Many people agree that DCA is a very solid strategy to accumulate crypto and have gains. But what is the best DCA strategy / timeframe? Should you DCA every day, every week, or every month. Here is my analysis answering this question in detail, based on a 3 year backtest on BTC. (3 years to include the bull and bear market) (BTC since it is the largest coin - other coins will be published soon) I know that many people are too busy to read the whole analysis, so I'll give my results here. Based on the past 3 years of BTC price data, the most profitable DCA strategy would be the Daily strategy, outperforming the others. For those of you who have the time and are interested in the full analysis, here goes: For this test, I have used an arbitrary amount of 5 USD per day, 35$ per week and 152$ per month. This equated to a very similar $ amount at the end of each of the data sets as total invested in the DCA strategy. Here are the results: This above graph shows the results of the 1 month DCA strategy, where you DCA into BTC every one month. We can see that it is in profit most of the time, and still a profitable strategy. The green line indicated the amount invested in USD, and the blue line indicates the total value of your investment. --------------------------------------------------------------------------------------------------------------------------------------------- This above graph shows the results of the 1 week DCA strategy, where you DCA into BTC every one week. We can see that it is in profit most of the time, and is more profitable than the 1 month. The green line indicated the amount invested in USD, and the blue line indicates the total value of your investment. --------------------------------------------------------------------------------------------------------------------------------------------- This above graph shows the results of the 1 day DCA strategy, where you DCA into BTC every one day. We can see that it is in profit most of the time, and is the most profitable from any of the previous strategies. The green line indicated the amount invested in USD, and the blue line indicates the total value of your investment. We can also see that it's maximum value is also the highest of all 3, reaching almost 10k at peak. --------------------------------------------------------------------------------------------------------------------------------------------- In conclusion, based on the data used (3 years, BTC), the best DCA strategy is a regular DCA every day, gaining more overall profits, and having stronger profit spikes throughout the investment strategy time. Remember: This is not invested advice. Based on a limited sample size. Informational only. As always, good luck and happy trading [link] [comments] |
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