What is the maximum and expected investment for DCA bots?

Dollar-Cost-Averaging (DCA) Bots allow you to automatically buy and/or sell crypto at regular intervals. Once a Base Order is open, the bot will open Safety Orders when the price goes against your expectations. This will allow you to improve your average entry size.

Each DCA bot has fixed rules which determine when the Safety Orders have to be triggered and how (size and number). That means, once a new Base Order is open, the DCA bot will monitor conditions and open (add on top to the Base Order) new Safety Orders, if the conditions are met.

Maximum Investment

The Maximum Investment is what would be deemed the "worst-case scenario": when all the Safety Orders conditions are met and all the Safety Orders are open at a single time - by no means does this mean that things cannot always go further down, so always be diligent with your investments.

The Maximum Investment can substantially differ from the Expected Investment and it is a way to measure the maximum exposure the bot could bring.

How is the Maximum Investment calculated?

If you input 100 USDT and the max n. of positions is 10, and the bot is allowed to open up to 5 safety orders (with the same size as the base order), your max investment will be 100x10x5=5000 USDT. That means, at a single point in time, you could have 5000 USDT open positions.

Expected Investment

Mizar has created the Expected Investment calculation tool to assist users in minimizing manual efforts and uncertainties. By analyzing the bot statistics from the past 30 days, Mizar can determine the distribution of Safety Orders across positions. Using these statistics, an estimation can be provided regarding the potential investment outcomes that users can expect.

Please remember the Expected Investment is based on historical data and has no guarantee of future results or used allocations, your investments are your responsibility. Also, do not consider this as financial advice, but rather an assumption based on statistics.

How is the Expected Investment calculated?

If you input the Base Order Size and Max. n. of positions, Mizar calculates what would have been the average Open Positions size (sum of all the Base and Safety Orders sizes) you would have had over the last 30 days, based on the actual trader performance.

What does this mean in practice?

Let's say the bot can open up to 1 Safety Order. Based on the last 30D statistics, the bot closed 50% of its positions at Base Order (that means, no Safety Order has been triggered) and 50% at Safety Order 1 (that means, an extra safety order has been opened on top of the base order). The Safety Order size is the same as the Base Order. Based on these statistics and your input, the expected investment can be calculated. If you input 100 USDT and the max n.of positions is 10, then your Expected Investment will be calculated as follow: 100x10x0.5 + 100x10x0.5x2 = 1500 USDT The first term takes into account the positions (50% chance) closed at Base Order.

The second term takes into account the positions (50% chance) closed at Base Order + Safety Order