Anyone else who is fearlessly buying the dip using DCA-type strategy?
I ran full backtests for a modified DCA strategy (~4k backtests since 2018) where the lower we go beyond moving averages, the more you buy.
In 93% of cases, they worked out better than regular DCA.
Looking at a base amount and then applying a multipler as follows:
- Below 200DMA: 2×
- Below 50WMA: 3×
- Below 100WMA: 4×
- Below 150WMA: 5×
- Below 200WMA: 6×
- Above all MAs: 0×
This system:
- Profitable in 94% of periods
- Average return percentage +248.64%
DCA:
- Profitable in 91% of periods
- Average return percentage: +166.33%
Seems like buying heavily in bear market will win out over DCA quite nicely.
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