DCA Safety Orders with Fixed or Trailing Take Profit

Summary

This document describes a long-only dollar-cost averaging backtest. It opens a base position within a selected date window, then places a series of lower-priced safety orders. The order levels step farther apart according to a scale factor, while order size can grow by a separate volume scale. The number of safety orders is capped. Once a position is open, the strategy uses a take-profit level based on average entry price; with trailing take profit enabled, it tracks a high and places an exit below that high.

The supplied settings include a BTC/USDT futures test over one week, but no performance results are given. The document identifies the main trade-off: averaging down increases exposure if price keeps falling. A fixed target may also be poorly matched to changing volatility, and historical results can differ from live trading due to costs and execution. The code does not show a stop-loss rule, so the safety-order limit bounds the number of additions but does not itself define a maximum loss.

Key ideas

• The strategy starts with a base long order and adds lower-priced safety orders as price declines.
• Safety-order spacing and size can increase through separate scaling rules.
• Take profit can use a fixed target or trail beneath a tracked high after the target condition activates.
• A cap on safety orders limits additions but does not define a stop-loss exit.
• The published test settings include no performance results, and live costs may change outcomes.

Tags

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