Dollar-Cost Averaging (DCA) is a popular strategy for gradually increasing your exposure to an asset, reducing the risk associated with timing the market by making buys at regular intervals.
DCA is now available on Ruby.Exchange, under the Advanced Trade tab of the Swap menu. Users can allocate a tranche of funds to be deployed into the market at any interval they want, as frequently as every minute, and can buy (or sell) any amount of supported tokens or stablecoins.
Check out our How-To Guide for DCA!
What Is Dollar-Cost Averaging?
The crypto markets are notorious for their volatility, and trying to time the market to gain the best price is extremely difficult, even for expert traders.
Dollar-Cost Averaging aims to avoid this problem by making many buys (or sells), dripping funds into your chosen asset with a series of smaller trades, executed either manually or automatically at regular intervals. For example, you may choose to buy $100 in bitcoin on the first day of every month.
If the price of BTC falls, your $100 will buy more; if it rises, you'll receive less. This has the effect of smoothing out the market's ups and downs—not getting the best possible price, but avoiding being caught out by spikes and crashes, too.
A number of CeFi platforms offer DCA, with monthly purchases via automatic bank transfer being popular. With DeFi, matters are complicated by gas. Because this is an additional flat fee for every transaction, it is uneconomical to make lots of small purchases on Ethereum mainnet, or even on most L2s.
Thanks to SKALE's zero-gas approach, Ruby can now offer this feature for users who want to DCA any amount of capital, over any time frame: Monthly, weekly, daily, hourly, or even every minute, if you want!
Read our guide, What DCA Interval Is Best?
Using DCA On Ruby
To place a DCA order on Ruby, simply head to the Advanced Trade page from the Swap menu, select your preferred asset pair from the dropdown menu at the top, and then click the DCA tab under the chart.
Enter the interval at which you want to trade, the amount you want to trade, and whether you want to buy or sell the token. You should also enter maximum and minimum prices, so your DCAs are only executed within a certain range (these values are required, even if you don't have any preference for a price range). Then click the Buy or Sell button, and confirm with MetaMask. That's it!
Each set of DCA orders you place costs a flat fee of 50 RUBY. The funds you have allocated to DCA are locked and cannot be used for other purposes while your orders are active, but DCAs can be cancelled at any time.