What DCA is and when it makes sense to automate it

What DCA is

DCA (dollar cost averaging) means buying the same amount of euros every week or every month, whether the price is up or down. When it is expensive you buy fewer units; when it is cheap, more.

In the example, your average price is €75 / 0.0325 = €2,307.69, below the average of the three prices (€2,333.33). That is the averaging effect: the cheap buys weigh more in units.

What it solves and what it does not

It removes the need to time the market and takes emotion out of the decision. It does not solve the asset falling for a long time: DCA spreads risk over time, it does not remove it.

• Discipline: the bot buys even when you would rather not look.
• Average price: smooths out the volatility of each buy.
• Simplicity: few decisions to make and easy to review.

If the price rises non-stop, a single buy at the start would have done better. DCA does not aim for the best possible result, but a reasonable one without having to time the market.

How to set it up with a bot

You need three decisions: which asset, how much and how often. The rest are safeguards: check there is enough balance, limit trading hours and set a maximum daily loss.

1. Describe the strategy in one sentence: “Buy €25 of ETH every Monday at 09:00”.
2. Review the workflow Shaper builds: weekly trigger, price, balance check and buy.
3. Leave it running on the paper account for a few weeks before thinking about real money.

Every DCA buy is logged with its price and cost, so the FIFO calculation for Spanish income tax is done for you once you trade for real.

Common variations

• DCA with top-ups: buy double when the price drops more than a set percentage in the week.
• DCA with a ceiling: do not buy above a given price.
• Split DCA: the same amount divided between several assets (for example, 70% BTC and 30% ETH).

All three can be described in one sentence and compared with a backtest before switching them on.

DCA and taxes in Spain

Buying is not taxable: while you only accumulate, there is no gain or loss to report. When you sell, each sale uses up your buys in order (FIFO), and with 52 buys a year at different prices doing it by hand gets messy. We explain it in the trading bot tax guide.