RSI-Triggered DCA with Scaled Buys and Average-Price Take Profit

Summary

This long-only strategy starts a position when RSI crosses below an oversold threshold, then adds buys whenever price falls a set percentage from the most recent entry. Each successive buy grows by a configurable multiplier, up to a fixed number of DCA steps. The strategy closes the full position when price rises above its average entry price by a target percentage, and plots the average price, target, and next DCA trigger.

The document explains how the last-entry reference spaces out additions and how larger buys can move the average price closer to lower entries. It provides illustrative sizing examples and suggests checking drawdown in TradingView’s Strategy Tester and observing triggers in paper trading. No performance results are reported. The approach can accumulate a large position during a sustained decline; the maximum number of additions limits further buying but does not cap losses or guarantee recovery. The text also describes webhook-based exchange execution, which requires external integration and is not itself modeled as live trading evidence.

Key ideas

• The initial long position opens when RSI crosses down through the oversold level while no position is open.
• Additional buys trigger after each specified decline from the last entry price, with size increasing by a configurable multiplier.
• The strategy exits the whole position when price reaches a profit target above its average entry price.
• A maximum DCA count limits additions, while prolonged declines can still produce substantial drawdown.
• The document recommends backtesting and paper trading to inspect behavior before considering live execution.

Tags

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