TL;DR: Normal DCA buys a fixed amount on a schedule. Multiplier DCA adjusts that amount based on live market conditions so you buy more on dips and less (or nothing) on pumps. It works until it overspends early in a selloff. The fix is simple throttling: cooldowns, caps, and time-sliced budgets.
When I first tested multiplier DCA, I thought I had found the perfect strategy. Backtests looked amazing. Every small dip was an “opportunity,” so the bot stacked buy after buy.
In live trading, it was a nightmare. A small drop could wipe out my whole weekly allocation, leaving nothing left if the price kept sliding.
That was my biggest early mistake.
The fix was adding two simple guardrails:
- Multiplier cooldown period between buys, depending on technical indicators and price
- A hard cap on the multiplier
Once I put those in place, my average entry price improved and I stopped blowing through capital too quickly.
Now I’m wondering: has anyone else run into the same issue when scaling buys?
How do you manage the risk of being out of ammo too soon in a bear market?
Top comments (1)
I’m curious what scaling other traders here are using. Do you prefer something aggressive like 1x → 2x → 3x, or more gradual steps like 1x → 1.5x → 2x?
I keep testing both but haven’t settled on which one feels safer long term.