Note Before Reading: This strategy is only for spot trading.


Stop-losses are supposed to protect you from losing money. In reality, they often lead to more losses. How many times have you set a stop-loss, only to watch the market hit it and reverse back up right after? That’s because stop-losses are often targets for market manipulation.

I used to follow all the rules and place my stop-losses carefully, yet I lost so many trades. Then I discovered DCA (Dollar-Cost Averaging), and it changed everything. Here’s how you can use it to improve your trading results.

Why DCA Works Better

Instead of setting a stop-loss, DCA allows you to take advantage of price dips. You divide your investment into smaller parts and buy more when the price drops, lowering your average entry price. This way, you turn dips into opportunities rather than losses.

The DCA Strategy

  1. Avoid Lower Timeframes if You’re Not a Professional
    Stick to timeframes of one hour or higher. Lower timeframes are noisy and unpredictable, often leading to bad decisions. Higher timeframes show more reliable trends, giving you bigger rides on trends and better opportunities to profit.

  2. Don’t Fear Market Dips
    The market tends to recover over time. Stay calm and avoid panic selling.

  3. Diversify Your Investments
    Don’t put all your money into one coin. Spread your investments across different coins and chains. When some coins are down, others may be up, giving you more flexibility to sell at a profit.

  4. Buy in Parts with Indicators
    Divide your trade into 2 or 4 portions. For example:

    • Buy your first portion when indicators like RSI show oversold levels (e.g., below 30).

    • If the price drops further, use a crossover in MACD or another dip in RSI as a signal to buy again, lowering your average entry price.

    • Repeat this process at each significant price dip to position yourself for the next trend reversal.

Why Avoid Stop-Losses in Spot Trading

Stop-losses often lead to unnecessary losses. They’re frequently targeted by larger players who trigger them before the market reverses. Instead of locking in a loss, DCA allows you to stay in the trade and wait for the recovery.

Key Takeaways

  • Avoid trading on timeframes below 1 hour unless you are highly experienced. Higher timeframes provide more reliable trends and bigger opportunities.

  • Stop-losses often hurt more than they help in spot trading.

  • DCA helps you manage dips by lowering your average entry price.

  • Use indicators like RSI, STOCH and MACD to guide your buy-in points.

  • Diversification and patience are key to reducing risk and maximizing profits.

Give it a try yourself!

Open a 4-hour chart on TradingView and test this strategy. Start by buying 25% of your planned investment when you see a MACD crossover. Instead of setting a stop-loss, use that level as an opportunity to buy another 25%. If there’s another MACD crossover below, add another 25%. Repeat this process as needed. Over time, this approach helps you lower your average entry price and increases your chances of turning a profit when the market rebounds. It’s a simple yet effective way to make market dips work in your favor!