dollar cost average
Double Up (DU) is a AILidex feature to automatically average down assets, bringing down the average cost per unit when prices drop after a regular buy order.
By bringing the average price per unit down, the price to exit the trade profitably gets lower. Of course, the obvious risk of averaging down is investing more in units that already dropped in price. Use this feature carefully.
TIP
Use the DU guestimator sheet to simulate your DU settings.
Feel free to make a copy of the file.
How it works
Below is an example of using Double up. The relevant settings used in the example would be:
DU_METHOD set to HIGHBB. With this method each DU buy is triggered when the upper Bollinger Band crosses down the last buy price.
DOUBLE_UP_CAP set to 1. Each DU buy is for 1:1 the amount of quote units already owned.
DU_CAP_COUNT set to 2. A maximum of two DU buys are allowed.
DU_BUYDOWN set to 1. The minimum required price difference for a DU buy compared to the buy price of the previous order.
Note that this example is kept simple intentionally, the amounts do not reflect real trades.
Using the example above: this is an overview of the buy orders made – notice how the average price per unit moves down after each DU buy:
Units Price per unit Invested (cumulative) Avg Price per Unit
Buy 100 12.500 1.250.000 12500
DU Buy 1 100 10.800 2.330.000 11650
DU Buy 2 200 8.090 3.948.000 9870
The resulting sell order would have profitably sold all available units at a much lower price than the initial buy order:
Units Price per unit Proceeds
Sell 400 10.000 4.000.000
Configurable options for averaging down are:
Buydown: A minimum price difference between the last buy and next DU buy. Regardless which DU method is picked, buydown must be reached for a DU buy.
DU method: HIGHBB as shown above, RSI where DU buys are only placed within a configurable RSI range, and a numerical value defining a percentage price drop compared to the last bought price.
Ratio: Defines how much extra quote units are bought for each DU buy.
Frequency: How many DU buy orders are allowed.
Trailing: DU buy orders can optionally use trailing.
DANGER
Double Up is a feature that allows you to invest significant amounts of your base currency. It’s important to be cautious when setting the ratio and frequency, and to ensure that you have sufficient available funds.
Relevant settings
Following settings options are available Double Up. None of them are relevant in futures strategies.
Double Up
Description
Values
Order types
Name
When set to true, DOUBLE_UP will try to get rid of bags by averaging down. Works on all strategies. Averaging down can use up a lot of balance, make sure you have enough of your base currency available to cover each double up buy. AILidex will start averaging down a bag according to your setting for DU_METHOD.
Averaging down means that you buy more units at a lower price, bringing down the average price per unit.
DU Method
Description
Values
Order types
Name
This sets the trigger for placing buy orders with double up.
When set to HIGHBB AILidex will start averaging down a bag when the actual upper Bollinger Band drops below bought price (not the distance from it as set in HIGH_BB) and the current price is a percentage below last bought price, as set in DU_BUYDOWN.
When set to RSI, buy orders will only be placed when the set RSI_BUY_LEVEL is reached and the current price is a percentage below last bought price, as set in DU_BUYDOWN.
When set to a numerical value like 2, buy orders will be placed when the price drops by 2% compared to the last bought price. Keep in mind that DU_BUYDOWN must still be reached when using numerical values for DU_METHOD.
Double Up Cap
Description
Values
Order types
Name
This defines the ratio to the pairs balance to be used for each consecutive buy when doubling up. Setting it to 0.5 would mean it uses a 0.5:1 ratio for averaging down.
It is recommended to set this as high as you can afford, to increase your chance to actually average down and sell at profit. Make sure that the resulting amount for the first double up order exceeds MIN_VOLUME_TO_SELL
Example with ratio of 1: initial buy of 100 LTC, first double up buy order is 100 LTC, second will be 200 LTC, then 400 LTC, etc. Example with 0.5 ratio: initial buy of 100 LTC, first double up buy order is 50 LTC, then 75 LTC, then 112.5 LTC.
Changing this setting after DU has started may lead to “cap count” not working as expected.
DU Cap Count
Description
Values
Order types
Name
Sets the maximum number of times double up orders may be placed.
When set to 1, a maximum number of 1 double up orders will be placed to average down. When you set this higher, double up can place more orders and has a higher chance of effectively averaging down and come closer to a profitable exit point each time it places a double up order.
DU Buydown
Description
Values
Order types
Name
The minimum price drop compared to the last bought price that needs to occur for double up buys to be placed.
Changing this setting after DU has started may lead to “cap count” not working as expected.
RSI DU Buy
Description
Values
Order types
Name
Use this to specify the maximum RSI level for buying when DU_METHOD is set to RSI.
Double up depends on several TrailMe settings to reach better entry points. The relevant settings are listed below.
Trail Me DU
Description
Values
Order types
Name
Use this to enable tssl-style trailing for double up orders.
Trail Me Buy Range
Description
Values
Order types
Name
This sets the buy range for TrailMe.
Setting a range of 0.5% at a starting price of 0.1 would set a range between 0.0995 and 0.1005. As long as prices keep moving downwards, the range moves down along with the price.
As soon as prices start going upward, the range freezes and a buy order is placed when the price crosses the upper boundary of the range.