How it works
The average entry is not the simple average of your prices. It is the total dollars spent divided by the total coins bought, so larger buys count more.
Use it before adding to a position: try the next buy and watch how much it lowers the average. Adding to a loser only helps if your original reason for the trade still holds.
Formulas
- Coins per buy = Amount ÷ Price
- Average entry = Σ Amount ÷ Σ Coins
- Unrealised PnL = (Current price − Average entry) × Σ Coins
Questions traders ask
Is DCA better than a single entry?
DCA smooths out timing risk; it does not improve the expected return of a bad asset. It works best with a fixed schedule decided in advance.