Backtesting Fixed-Amount Dollar-Cost Averaging at Multiple Frequencies

Summary

This document describes a backtest framework for recurring fixed-amount purchases on daily, weekly, or monthly schedules. The schedule determines when to buy within a selected date range; each purchase converts the specified cash amount into units at the current close. The framework tracks total contributions, units held, average purchase cost, current value, unrealized profit, and return, and presents these metrics alongside an average-cost line.

The supplied example uses a daily chart and BTC/USDT futures settings, but the document reports no comparative performance results. Its own caveats include omitted fees, taxes, slippage, and liquidity effects, as well as sensitivity to schedule and contribution settings. It also notes that a buy-only approach has no defined exit and can remain exposed through prolonged declines. The tool is therefore useful for comparing contribution schedules and tracking a simplified historical accumulation path, but its output does not establish realistic net returns or future performance.

Key ideas

• Purchases are triggered by a selected daily, weekly, or monthly schedule within a chosen date range.
• Each contribution is fixed in cash, so the quantity purchased varies with the closing price.
• The framework tracks invested capital, units, average cost, current value, and unrealized return.
• The published example does not account for transaction costs, taxes, slippage, or liquidity.
• The described method focuses on accumulation and does not specify an exit rule.

Tags

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