DCA Strategy Optimizer

This calculator optimizes a price-triggered DCA strategy, which is ideal for volatile assets. It finds the optimal number of trades to minimize commission impact and uses volatility to determine the price-drop percentage that should trigger each subsequent purchase.

What this calculator helps you do

You have cash ready to invest and want to avoid going all-in at once. This optimizer builds a dollar-cost averaging plan that spreads the trades, keeps commissions in check, and uses the asset's volatility to decide when the next buy should happen.

  • Provide your investment amount, current price, trading fees, and the asset's annualized volatility (a measure of recent price swings).
  • Receive the recommended number of trades, the price-drop trigger to watch for, and a clear schedule to follow.

Unsure about volatility? Use the 1-year figure from a data provider such as Yahoo Finance or TradingView—it keeps the plan aligned with recent market behavior.

Your strategy will appear here

Fill out the form to calculate your optimal DCA plan.

How It's Calculated

The optimizer finds the ideal number of trades by balancing three key constraints to maximize efficiency:

1. Commission Cap: It finds the maximum number of trades where total fees will not exceed 5.00% of your capital. This prevents fees from significantly eating into your investment.

2. Trade Viability: It ensures that each individual trade is large enough to be practical. For whole shares, each trade must be able to afford at least one full share plus the commission. For fractional shares, the amount invested per trade must simply be greater than the commission fee.

3. Divisibility (for Whole Shares): After finding the optimal number of trades, the calculator adjusts the Total Shares to be Bought to ensure it is perfectly divisible by the number of trades. This guarantees every trade in the base plan consists of a whole number of shares, with any remaining capital noted in the implementation guide above.

The price-drop trigger, which tells you when to make your next purchase, is then calculated using the asset's volatility:

$$ \text{Trigger Percentage} = \frac{\text{Annualized Volatility}}{\sqrt{\text{Optimal Trades}}} $$

Footnotes

1 Annualized Volatility: This field requires the asset's Annualized Volatility, a statistical measure of its price fluctuations over a year.

Method 1: Look It Up (Recommended)

The easiest and most common method is to find this value on a reputable financial data provider, such as Yahoo Finance, TradingView, etc.

Method 2: Manual Calculation (For Advanced Users)

If you cannot find the value, you can calculate it from historical price data. Volatility is always calculated from returns, not prices, and log returns are the professional standard.

  1. Get Daily Prices: Download the "Adjusted Close" prices for your asset. To compare long-term and short-term behavior, get 5 years of daily data.
  2. Calculate Daily Log Returns: For each day, calculate the log return using the formula: Rt = ln(Price_t / Price_t-1)
  3. Calculate Standard Deviation: Calculate the sample standard deviation (σ_daily) of all the daily log returns you just generated.
  4. Annualize the Volatility: Scale the daily volatility to an annual figure by multiplying by the square root of the number of trading days in a year (252): σ_annual = σ_daily × sqrt(252)
Which one to use?

The 1-year volatility is the standard and preferred input as it reflects the asset's more recent behavior. You should use the 5-year value for context.

If the 1-year and 5-year values are very different, it's a strong signal that the asset's fundamental character has recently changed. Trust the 1-year value.

If the values are similar, the 1-year value is still slightly preferred for its recency.