HydraDX DCA Feature — a Guide How to Use DCA Trading

Learn how to trade like a pro with HydraDX Dollar-Cost averaging

The Polkadot DeFi is getting to be more advanced — uniting parachains to create more use cases and ways of communication via the XCM. Thus, creating the financial core for the whole Dotsama ecosystem. Thus, we’d like to highlight recently launched feature on the HydraDX — DCA trading that allows to execute trade over certain period of time to reach the average and more fair price for purchased assets.

In this guide, we’d like to demonstrate the guide-on how to DCA using HydraDX, and explain why it’s an awesome feature for capital efficiency.

What is DCA, and why do we need it?

Dollar-cost averaging involves investing the same amount of money in a target security at regular intervals over a certain period of time, regardless of price. By using dollar-cost averaging, investors may lower their average cost per asset and reduce the impact of volatility on the their portfolios.

Thus, we can see in the image above an example of a DCA strategy, where an investor buys several assets over a specific period, starting from a high price and finishing with a lower price at the end.

This approach helps achieve a lower average purchase price for the assets compared to the initial price. It’s an excellent strategy for portfolio management, as it helps avoid emotional or impulsive actions in the market.

DCA (Dollar-Cost-Averaging) on HydraDX

HydraDX DCA, a fantastic tool for users who want to gain exposure to major assets in the Polkadot ecosystem, allowing users to accumulate more assets or achieve fair price execution over time (especially during the bear market).

Moreover, the launch of (DCA) on HydraDX transforms the flow and utilization, not only users, but the Polkadot parachains Treasuries.

Leveraging cross-chain messaging (XCM), parachains can now execute DCA orders and manage their treasuries more efficiently. They can exchange their native tokens into various assets, such as DOT for parachain leases or USDT for salary payments to staff.

A guide how to DCA — Let’s start DCAing!

Now, let’s try place our first DCA order on the HydraDX DEX.

Go to the HydraDX DEX –> https://app.hydradx.io/trade

Click on the Connect Wallet button.

Choose the wallet installed on your device from the list, in our case it’s Polkadot.js

Choose the wallet installed on your device.

Go to the header section and click on the Trade DCA button.

Click on the Trade DCA.

Choose the spending asset that you’ll use for buying another asset. In our case, we’ll use USDT for buying HDX.

Choose the asset in the menu to pay with.

In this section, you enter the swap amount for each DCA trade, in our case we enter 5 USDT, meaning that each trade will buy HDX for 5 USDT.

Enter the swap amount – 5 USDT, for example

Next, choose the interval for each trade execution. You can choose 1 hour for each trade, 4 hours, 8 hours or 24 hours.

Choose the interval for execution of each trade – 2 hours, for example

Enter the total budget for your DCA. In our case it’s 30 USDT, meaning DCA will execute 6 trades for 5 USDT. (30 USDT Budget = 5 USDT each trade).

Enter the total budget 30 USDT, for example

And you’re good to go! Click on the Schedule DCA trades to start DCAing!

Click on the Schedule DCA Trades button

And sign the transaction! And you’re good to go! You can check your open orders in the menu, it shows closed and open orders as well as history.

If you’d like to cancel execution of DCA, just simply click on the Terminate button.

Click on the Terminate button if you want to cancel your DCA order.

Now, you know how to trade like a pro! Stay hydrated!

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