Fixed-Budget Dollar-Cost Averaging as a Passive Backtest Benchmark

Summary

This document presents scheduled dollar-cost averaging as a passive comparison strategy for active trading systems. It invests a fixed quote-currency amount on either a selected weekday or every set number of bars, within configurable start and end dates. Buys stop when the accumulated investment would exceed the initial capital, keeping the comparison within a fixed capital budget. There is no market-timing signal or intermediate exit; the accumulated position is closed at the end of the chart history to produce a final equity reading.

The script models commission and slippage and allows the frequency to be adjusted for the chart timeframe. The explanatory notes show how investment size and interval determine the time needed to deploy the budget, and warn that a chart window may end with capital still unused. Conversely, the budget may be fully deployed well before the chart ends, after which the position remains exposed. This is a benchmark design, not evidence that DCA outperforms active methods; it has no active risk management and remains exposed to drawdowns until final liquidation.

Key ideas

• Scheduled purchases can be used as a passive baseline for comparing active strategies.
• The strategy offers weekday-based or bar-interval purchase schedules.
• A capital cap prevents purchases from exceeding the initial budget.
• The position is liquidated at the chart’s end for backtest accounting, not due to a trading signal.
• Deployment timing depends on the chosen budget, purchase amount, interval, and chart window.

Tags

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