RSI-Triggered DCA With Multiplied Buys and Average-Price Exits

Summary

This long-only strategy opens a position when RSI crosses below an oversold threshold. If price then falls by a set percentage from the most recent entry, it adds another buy. Each successive DCA order scales from the starting quantity by a configurable multiplier, subject to a cap on the number of additions. The strategy closes the whole position when price rises above the position’s average entry price by a specified percentage.

The document describes configurable rules and chart plots for the average price, take-profit level, and next DCA threshold. It presents the approach as a way to lower break-even through buying at lower prices, but provides no backtest results or performance evidence. Averaging down can increase exposure as losses deepen; limiting the number of additions does not establish a maximum account loss. Results would depend on asset, timeframe, execution, and parameter choices.

Key ideas

• The initial long entry is triggered by RSI crossing below a configurable oversold level.
• Further buys trigger after a specified decline from the last entry price.
• The quantity of each additional buy grows according to a configurable multiplier, with a maximum number of DCA steps.
• The strategy exits the full position after price exceeds the average entry price by the configured profit target.
• The document gives no performance results, and repeated buying can increase downside exposure.

Tags

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