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Backtesting Arena

Backtesting Arena

PricingBlogBuild SaaS
🧭How it works🥋Strategies📖Wiki📓Glossary🎓How-To📚Reports
🧭Market State Today
🧱Market Structure₿BTC × Macro📈Market Pulse
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🎯Dip Decision Tool
💶DCA vs. Lump Sum
🔗Portfolio Correlation
💧Liquidity Fair Value
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📊Bitcoin Charts
📍Max Pain History
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Strategies›DCA (Dollar-Cost Averaging)
DCA (Dollar-Cost Averaging) master

DCA (Dollar-Cost Averaging) Strategy

Buy a fixed amount on a fixed schedule — week after week, regardless of price. Smooths volatility, removes timing decisions.

Try in Arena →View Live Insights →

Quick Facts

Type:
Reference
Plan:
Free
Asset Classes:
Crypto · Tokenized RWA
Indicators:
—

Platform Backtest

ⓘ
CAGR
+11.3%
Win Rate
—
Max DD
-48%

Default parameters · BTCUSDT · 1d · 4 years · B&H +31.0%

How It Works

DCA (Dollar-Cost Averaging) is the most popular passive strategy outside Buy & Hold. Instead of investing your entire capital on day one (which exposes you to the timing of that single day), you split it into many smaller, equal-sized purchases on a fixed schedule — typically weekly or monthly.

Example: $10,000 to invest, weekly DCA over 1 year = $192 spent every Monday for 52 weeks. The average price you end up paying is the time-weighted average of those weekly buys.

Why it works:

  • Removes timing decisions: you don't have to guess whether today is a good entry — you just buy.
  • Captures volatility on your side: when prices drop, your fixed amount buys more units (lower cost basis); when they rise, your fixed amount buys fewer (auto-pacing). Mathematically, you tend to end up with a lower average cost than the simple time average of the price.
  • Reduces psychological pressure: the worst thing about volatile assets like Bitcoin is the temptation to sell during crashes. DCA users see their next buy as a discount, not a loss.

On the platform: the DCA strategy is implemented as a reference for comparing against active strategies (analogous to Buy & Hold). It uses weekly purchases with the total capital divided equally across the entire trading window. The CAGR is computed from the final portfolio value vs. total invested capital — directly comparable to other strategies' CAGRs.

DCA is most powerful when combined with a long time horizon. Over multi-year windows, the timing of the start date matters far less than with Buy & Hold.

Entry & Exit Rules

▲Entry

  • ●Every week (or interval): buy a fixed fraction of total capital
  • ●Continue until total capital is fully invested or trading window ends

▼Exit

  • ●Last day of the trading window — sell everything at close
  • ●No interim selling

Live Backtest

Strategy CAGR
+11.3%
Buy & Hold CAGR
+31.0%
Trades
213
Win Rate
—
Y-axis: Equity (USD, $10,000 starting capital)2022-07-23 → 2026-07-22

BTCUSDT · 1d · 4 years · default parameters · refreshed daily

Run with my own parameters →

Performance per Asset

Top-10 assets by average CAGR (1d interval), aggregated from community + platform backtests. Actual results depend on parameters and period.

AssetCAGRvs B&H★Win%YearsRuns
ENJUSDC+55.7%-588.7pp—100%0.92
DOGEUSDT+39.1%+17.3pp—100%6.82
TRXUSDC+33.6%-16.8pp—100%7.22
SOLUSDT+32.0%+12.3pp—100%5.72
BTCUSDT+20.6%-10.3pp55100%8.917
WBTCUSDT+10.0%+3.3pp—100%3.02
PAXGBNB-0.4%+0.1pp—0%3.32
BCHBTC-3.2%+5.0pp—0%6.42
THETAETH-3.5%+9.3pp—0%6.52
REQUSDT-5.6%+5.4pp—0%4.72
pp = delta vs avg-B&H · ★ = robustness score 0-100 (CAGR / win-rate / drawdown / consistency).Full Insights →

Pseudo-Code

expand
// Setup
total_weeks = (end_date - start_date) / 7
weekly_amount = total_capital / total_weeks

// Each week
for week in range(total_weeks):
  buy weekly_amount worth of asset

// At end
SELL all at close

Strengths & Weaknesses

+Strengths

  • ●Zero timing skill required — accessible to everyone
  • ●Smooths out volatility — psychologically easier to stick with
  • ●Outperforms B&H in flat or downward-trending markets
  • ●Easy to automate (most exchanges support recurring buys)

−Weaknesses

  • ●Underperforms B&H in steady uptrends — capital sits idle until invested
  • ●More transaction costs (one fee per buy)
  • ●Doesn't reduce total drawdown risk — once fully invested, you're fully exposed
  • ●Doesn't help with the exit decision (when to sell)

Frequently Asked Questions

DCA vs. Buy & Hold — which one wins on Bitcoin?+

Depends on the time period. In Bitcoin's strong uptrends (e.g. 2017, 2020–2021), Buy & Hold wins because DCA leaves capital uninvested. In sideways or bear phases (e.g. 2018, 2022), DCA wins because lower-priced buys reduce average cost. Over long-enough windows (5+ years), they tend to converge — both significantly outperform most active strategies on BTC.

Should I DCA weekly or monthly?+

Higher frequency = smoother averaging but more transaction costs. Weekly is a good middle ground for most retail traders — frequent enough to capture volatility, low enough to keep fees manageable. Monthly works fine too if your exchange charges per-trade fees. The key is *consistency*, not frequency — pick a schedule and stick to it.

Can I combine DCA with active strategies?+

Yes, and many serious crypto holders do exactly this. Common pattern: split your capital — say 70 % goes into DCA (the "core"), 30 % is reserved for an active strategy (the "satellite") that exits during high-risk regimes. The active part absorbs drawdowns; the DCA part captures the long-term trend. Backtest the satellite portion separately on the platform.

Related Strategies

Buy & Hold

The benchmark for everything else — buy on day one, hold forever. The reference every strategy is measured against.

—

Golden Cross

The classic trend-following signal — when the 50-day SMA crosses above the 200-day SMA, the trend has flipped bullish.

SMA

RSI / SMA Cross

A momentum signal that triggers when the RSI crosses its own moving average — combining oversold detection with trend confirmation.

RSI · SMA

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