Adaptive DCA with Trend, Momentum, and Volatility Indicators

Summary

This document presents a long-only dollar-cost averaging strategy that combines EMA trend conditions, MACD, RSI, and Bollinger Bands. It starts with a configurable purchase allocation and increases the next allocation after each buy, subject to a maximum. Additional buys are conditioned on a bearish signal and a price decline from the average entry price that widens with each DCA step. The described exits require a minimum unrealized profit and can be triggered by weakening conditions, a drop from a recent high, or a stop level.

The parameter list and source code provide implementation details, but no backtest results or evidence that the indicators improve returns. The default stop-loss is set at 100%, which the document notes is effectively unlikely to trigger before the price reaches zero; the minimum-profit condition also gates the described sell logic. The recent-high calculation is limited to a 500-bar lookback. These choices, plus rising allocations as prices fall, leave substantial exposure and require careful validation and position-risk controls.

Key ideas

• The strategy combines EMA alignment, MACD, RSI, and Bollinger Band conditions to guide long entries and exits.
• Initial purchases start at a configurable allocation, with later DCA allocations increasing up to a cap.
• Further buys require bearish conditions and a progressively larger decline from the average entry price.
• The default 100% stop-loss level is effectively unlikely to trigger, and sell conditions require minimum unrealized profit.
• The document gives no performance evidence, and its recent-high signal uses a 500-bar lookback.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.