Binance has launched a new DCA function. Many people must not understand what problem this function solves and how to use it.

 

After all, most people only know how to buy, sell and open long and short 😂, and the official function introduction is very complicated. I will try my best to explain it in plain English.

 

First of all, this is a spot trading strategy that only involves spot buying and selling and does not involve contracts, so there will be no liquidation (but there will still be losses).

 

What advantages does it have over spot trading?

 

For example, when we buy spot, for example, if we place a spot order at BTC 25,000, then when it drops to around 25,000, the following two situations will occur:

 

1. Many people think this is an important support, so many people start taking orders at 25500, which is to take a step back. Then the market started to rebound before it fell to the position where I placed the order. As a result, I completely missed the order and broke my thigh.

 

2. Or maybe the market plummeted due to heavy volume, directly breaking through 25,000 and falling to 24,500. As a result, I lost money when I bought it, and I regretted why I didn't trade it lower and bought my stock.

 

How have we responded in the past? I will place orders in batches at 25500-24500, which will prevent shortfalls and dilute costs. DCA solves this problem by using strategies to achieve food purchases at a preset average price and reduce the impact of market fluctuations on you.

 

It can also automatically calculate the comprehensive cost and then automatically sell according to the preset take-profit percentage. For example, if it buys at 25,500-24,000, the comprehensive cost is 25,000, and then if you set a 10% take profit, it will all sell at 27,500 to take profit.

 

So DCA is just a tool. It is convenient for you to place orders and take profits on spot transactions. It is not a magical tool that can help you make stable profits. If you want to make money, you still need to learn more.

 

You can find and use it from APP—More—Trading—Trading Robot—Spot DCA.