Learn How to DCA Into Crypto With Bybit’s DCA Trading Bots
Contrary to popular belief, you can’t perfectly time the bottom. From buying high and selling low to letting fake news causing us to panic sell, emotions often get the better of us Don’t take our word for it; even seasoned investors like Peter Lynch and Warren Buffett refrain from timing the market. Instead, they believe in the Dollar Cost Averaging (DCA) strategy. Curious about how you can include this tried-and-true investment strategy into your arsenal? Read on as we cover how you can immediately begin your DCA with Bybit’s all-new DCA trading bots.
What Is Dollar Cost Averaging?
Dollar cost averaging is an investment strategy that ensures investors invest regularly, regardless of the market sentiment. By buying at regular intervals, investors can mitigate the risk of timing of the market and continue to build their positions that they’re willing to invest in for long periods of time.
Although it might seem counterintuitive, investors who have a more hands-off approach tend to profit in the long run with the DCA strategy. By eliminating the need to time each buy and dedicating a constant sum of money to long-term holds, investors can effectively avoid common pitfalls like not investing consistently and overleveraging when lump sum investing. These reasons combined with the mistakes mentioned above makes DCA an extremely attractive action plan for both new and seasoned investors.
Who Best Fits the DCA Strategy?
DCA will be perfect for you if you fit these profiles:
1) Long-term Holder
You are someone who wishes to build a long-term crypto portfolio and has a multi-year investing time horizon. By utilizing DCA, you can effectively lower your average cost over a prolonged period of time with regular buys. This gradually builds up your position to your desired exposure level while preventing the risk of over-leveraging.
2) Low-risk Tolerance Investor
You are someone who prefers investing in assets with lower volatility. While it’s a fact that cryptocurrency prices tend to fluctuate wildly, this doesn’t mean investors with a low-risk tolerance should stay out of the crypto markets entirely. If you’re someone who’s bullish for the future of crypto, you can systematically buy in with the DCA strategy. This ultimately minimizes market timing risks and makes the idea of investing in crypto less daunting to investors with low-risk tolerance.
3) Beginner Investors
You are someone who’s new to the crypto market and are looking for ways to invest. For newcomers, investing can certainly seem intimidating as the question of what to invest in and how to invest regularly pop up. Fortunately, DCA provides the perfect opportunity for beginner investors to enter the market as it skips aspects like Technical Analysis. Rather, it allows you to dive straight into investing by allocating a portion of your funds to buying in without trying to time the market.
Find yourself relating to either of these personas and want to learn more about DCA? Scroll on as we reveal how our DCA trading bots can cater to your personal investing needs and targets.
Why Use Bybit’s DCA Trading Bots?
That said, you might be wondering why you should even consider using DCA trading bots if it’s so easy to start DCA yourself. While investors should allocate a fixed amount of funds for investing consistently, what often ends up happening is that factors like carelessness and fear come into play. For instance, you might forget to make your intended buy because of the bustle of life’s responsibilities or be fearful of purchasing your crypto because of a potential catalyst.
That’s where Bybit’s DCA trading bots comes in handy. If you’re even remotely considering the DCA strategy, you’ll be glad to know that our DCA trading bots offer the following:
Zero fees so you can earn more profits over time
Highly customizable parameters to fit your investing needs
Low barrier to entry with a minimum investment amount subject to the invested cryptocurrency as per Bybit’s Spot trading rules.
Support for both USDT and USDC
After configuring Bybit’s trading bots with your investment amount per buy and overall time horizon, you’re good to go as the bots will DCA into as many as five different coins or tokens. By consistently making buy orders according to the rules set by you, you’ll never need to fret about irregular buys again.
How to Set Up Bybit’s DCA Trading Bots
Setting up Bybit’s DCA trading bots is simple. Ready to get started? Here’s how you can set up your personal DCA trading bot on your PC:
1. Currency
First, you’ll have to fund your bot. Start by selecting either USDT or USDC. Do note that you’ll be unable to create a mixed portfolio of stablecoin pairs so make sure you check that your preferred trading pairs are supported.
2. Selected Cryptocurrencies
Now it’s time to build your DCA portfolio. From BTC to ETH, you can select up to five different cryptocurrencies to DCA into. Once selected, input the corresponding amount of stablecoins that you’ll want to use to purchase with each DCA buy order. You can select up to five coins for your DCA bot by clicking on Add Crypto.
3. Investment Frequency
Once that’s settled, you’ll now need to determine how often your DCA trading bot makes a buy order. From every ten minutes to once every four weeks, there are all sorts of time intervals to help you beat the volatility that comes from usually timing your buys.
4. Maximum Investment Amount for DCA Bot
As an optional parameter for more cautious investors, this field ensures that there’s a limit to the total amount of funds you commit to this DCA portfolio. If you hit the limit that you have set, the DCA bot will automatically terminate and all assets will be transferred to your Funding Account.
Once you’ve confirmed all these parameters, click on Create Now and Confirm to finish creating your DCA bot.
Modifying Your DCA Bot’s Parameters
Want to change things up in light of recent volatility? Follow these steps below:
1. Locating Your Trading Bot Dashboard
Click on View My Bots under My Bots in the top right corner of the Bybit Trading Bot page. Then click on Details in the upper right corner of the DCA bot whose parameters you want to modify.
Thereafter, click Parameters and then click on Modify to change said parameters.
2. Select Parameters and click on Modify
Here, you’ll find the following parameters that you can modify:
Investment Frequency
Total Investment Amount
Max. investment amount for DCA bot (Optional)
Once done, click on Save to finalize your changes.
Do note that the coins selected for each bot cannot be modified, meaning you’ll have to create an entirely new DCA trading bot with us if you want to add another cryptocurrency to your portfolio.
Terminating Your DCA Trading Bot
Keen on locking in those profits? Here’s how you can actualize your gains:
1. Locating Your Trading Bot Dashboard
Head back to your trading bot dashboard by clicking on View My Bots under My Bots in the upper right corner of Bybit Trading Bot page.
2. Select Your Preferred Processing Method
Click on Terminate in the upper right corner of your chosen DCA trading bot to close it.
Upon selecting the termination option, you’ll have three options when it comes to what you’ll receive:
Keep the coins you’re currently holding from DCA
Liquidate the coins you’re invested in and receive them in your chosen stablecoin
Liquidate the coins you’re invested in and receive them in BIT
After successful termination, your funds will automatically be transferred back to your Spot Account.
Note: Transactions and swaps between coins will be based on the existing market price, and the corresponding Spot fee will be charged. If a direct swap between the two coins isn’t supported, the holding coins will be converted into USDT first, which may involve additional trading fees.
Sharing Your DCA Trading Bots
As DCA trading bots do not currently support Copy Trading, here’s how you can share your bots:
1. Finding the Share Option on Your Trading Bot Dashboard
On the My Bots page, click on Share in the upper right corner of the DCA bot column to share your preferred DCA trading bot.
2. Sharing Your DCA Trading Bot
Click on the copy icon to share the Bybit Trading Bot page URL with your friends.
The Bottom Line
Now that you’re familiar with the ins and outs of Bybit’s DCA trading bots, you’re ready to dive into the world of DCA and investing in cryptocurrencies. Ultimately, our DCA trading bots make investing safely a breeze as the act of investing is automated, lowering the risk of common issues like overleveraging and buying during all-time highs. So what else are you waiting for? Automate your DCA strategy by setting up your very own DCA trading bots on Bybit today!
We hope this Bybit trading bot guide has been useful for you in your pursuit of automated investing and trading. Here's all the facts about our trading bots, summarized in one simple infographic.
