A few weeks ago I downloaded all historical data from the Fear and Greed Index, and wrote a backtesting script in python. I wanted to find out how DCA performed if you increased your DCA amount the more FEARFUL the market was, and invested very little during times of greed. The post is here.

Tons of people asked me to incorporate selling during EXTREME GREED, and also pointed out other metrics they wanted me to test. So here it is!

Start date: March 17th 2018
End Date: September 9th 2023 (Bottom or Top is not a fair end date)

1. Benchmark DCA

Traditional “vanilla” DCA to measure our results against.

• $100 invested each 7 days

2. Fear & Greed DCA NO SELLING

Each 7 days we check the F&G index and invest:

• $150 if “Extreme Fear”
  $100 if “Fear”
  $75 if “Neutral”
  $50 if “Greed”
  $25 if “Extreme Greed”

3. Fear & Greed DCA WITH SELLING

Each 7 days we check the F&G index and:

• $150 if “Extreme Fear”
  $100 if “Fear”
  $75 if “Neutral”
  $50 if “Greed”
  Sell 5% of accumulated BTC if “Extreme Greed”

4. PI Cycle Top Indicator

More than one person asked me to test this one. The PI cycle top is the 111D and the 350D MA x2. It can be found here for example. The idea is when the 111D cross above the 350Dx2, you should run for the hills.
Each 7 days we check if the 111D is below the 350Dx2 and:

• $100 invested if below
  Sell everything if above

5. AlphaSquared Risk Model DCA

The top comment mentioned this one. I signed up for a free account to test it so you don’t have to. I used their default “Aggressive” strategy with 0% profits reinvested.

Each 7 days we check the risk and:

• $130 if risk if 0/100
  $120 if risk is 20/100
  $50 if risk is 55/100….. And so on
  Sell 30% if risk 80/100
  Sell 70% of if risk 90/100

​

6. Drumroll.......The results!

​

\ Final Value (BTC) = The value of your entire portfolio in BTC. We value like this since even for the strategies where you sell to fiat, you can immediately convert it to BTC at the final price if you like.*
\ SATS per dollar = Wealth-in-BTC / Amount-Invested*

IMPORTANT!!

This is just my testing and ideally you should conduct these tests across several time frames. I might actually do that because I think these results warrant a more thorough investigation using confidence intervals or statistical significance. For example, both PI Cycle Top and AlphaSquared was created after 2018 so you want to adjust for that. That would take some more effort though, so please let me know if that’s something you guys are interested in.

Regardless these are very convincing results in favor of adjusting your DCA strategy. Hope you find it useful in the upcoming bull!