How to Use Dollar-Cost Averaging (DCA) for Crypto Trading? Follow Candlestick Smart Money

Quicktake

  • Dollar-cost averaging can reduce the impact of crypto price volatility and lower the average cost.
  • Smart Money uses DCA to buy tokens at lower prices.
  • Follow Smart Money to apply your DCA strategy to raise gains.

What is DCA (Dollar-Cost Averaging)?

DCA is a crypto investing strategy in which an investor buys the same or smaller amounts of crypto over time. Likewise, you can also use DCA when selling your holdings.

By using DCA, traders will be able to get the following benefits:

  • Lower average cost.
  • Reduce the impact of price volatility.
  • Avoid the risk of investing “a lump sum” at a peak. 
  • Emotions are less affected.

How does Smart Money Apply DCA?

Smart Money traders usually spread their investments over multiple purchases, typically a few hundred or thousands of dollars per time, according to our observation.

On Aug 26, we observed that Smart DEX Trader 17a8 purchased LSVR tokens and started creating a new position through the DCA strategy.

LSVR DEX Trades - Smart Money

We’ve been tracking this trader’s behavior for the past few days. The latest LSVR DEX Trades indicator reveals how Smart Money reduced the average cost.

This trader has now invested $7,380 worth of LSVR tokens spreading into nine transactions, and the average cost is about $0.0037963 per coin.

LSVR DEX Trades - Smart Money

If this Smart Money invested all funds at the start on Aug 26, the cost would be $0.004599 per token. The DCA strategy resulted in a 17% cost savings in this investment case.

The Net Buy Amount indicator helps you see the distribution of Smart Net buy and feel this strategy better.

LSVR Net Buy - Smart Money

In Smart Money, it’s common to use this tactic to reduce purchase costs. Take the latest BAL DEX Trades chart, for example, Defi OG 2e4b bought totaling $18,788 value of 2803.83 tokens divided into six transactions.

BAL DEX Trades - Smart Money

The average cost is $6.7 per coin, lower than all his entry prices in 6 transactions.

Find The Target Tokens, Apply DCA by Following Candlestick Smart Money

The first step is to find the target tokens – the hidden GEMs that Smart Money is doing DCA.

How? 

  1. Four token ranking lists on the Explore page will leak out these target tokens – Top Gainers, Top Losers, Top Net Buy Value & Top Liquidity Added. 
  2. Next, turn on the Smart Money mode. Then you can see which tokens Smart Money is buying the dips/rise or accumulating in the past 3d, 1d, 1h, and 5min.
The Explore Page - Smart Money Mode

After finding the target tokens, the next step is to follow the Smart Money to DCA.

  1. Click to check the token’s Live Trading —> DEX Trades info
  2. Turn on the Smart Money mode. You will see each Smart Money’s purchase/sell orders volume and prices.
  3. Follow it to start your DCA
Live Trading - DEX Trades (Smart Money Mode)

For example, on Aug 24, we observed that SYN was the Top 1 token in the Smart Money Top Net Buy Value leaderboard.

Top Net Buy Value (Smart Money)

The DEX Trades chart detected that the digital asset fund Arca used a dollar-cost-average strategy to invest in SYN. Instead of investing $195,382 in a trade at one time, it separates the total amount into three transactions—purchase price from $1.23 to $1.3.

SYN DEX Trades (Smart Money)

On Aug 25, the SYN went up 13% in just a few hours after we shared Arca’s entry prices on Twitter. If you follow them, not only buy dips but buy cheap tokens.

Note: Candlestick labeled 1342 Smart Money addresses, including 390 Defi OGs, 102 Crypto VCs and founders, and 850 Smart DEX traders.

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