I backtested Dynamic DCA vs Regular DCA over the last 4 years

I’d say DCA is by far the most advocated strategy on this sub. But it's common to see people suggesting adjustments to it. The goal is usually to buy more Bitcoin during dips, creating some form of “Dynamic DCA” based on indicators like drawdown.

Although many people here are against changing the sacred DCA strategy, I think Dynamic DCA has its place. I mean, even River introduced “Supercharged” recurring buys, which is essentially a type of Dynamic DCA.

So I decided to build a backtesting tool to see if Dynamic DCA is actually worth it.

https://preview.redd.it/unzg55oxg2sg1.png?1881&format=png&auto=webp&s=b8888de6a48318a0b2b24bb73317edfbf7429f15

In this test I’m comparing two strategies over the last 4 years: a regular weekly DCA buy of $300 and a Dynamic DCA strategy based on drawdowns that works like this:

- Base buy: $100

- Drawdown >= 25%: $300

- Drawdown >= 50%: $600

The result is impressive. The Dynamic DCA strategy almost doubles the return compared to the regular DCA. While the regular strategy ends up with around $103k and 1.55 BTC, the Dynamic version reaches about $153k and 2.31 BTC. All that while investing roughly the same amount of money.

If you want to try it yourself and share some feedback, feel free to test it here. You can also experiment with other indicators like Fear & Greed or the Mayer Multiple.