What is Contract Martin Gale Trading (DCA)?

Introduction to Contract Martin Gale Trading
Contract Martin Gale trading, also known as DCA (Dollar Cost Averaging) trading, is a common trading strategy in contract trading used to diversify risk and average costs. This strategy is typically employed in investment markets, including cryptocurrency contract trading.
*DCA stands for Dollar Cost Averaging.

Basic Principles of Martin Gale Trading Strategy
In a dual-sided market where you can bet on both rising and falling prices, this strategy involves betting only on one side. If the judgment is incorrect, it continuously adds to the position in the opposite direction until selling at a profit during a market pullback. Currently, this strategy is widely adopted by various types of investors due to its advantages. However, given the nature of market risks, it cannot guarantee profits and requires risk management.

Martin Gale Trading Strategy Participation Process
The Martin Gale strategy is an approach that operates in different market cycles. Its core idea is to buy after a fixed percentage drop in price and automatically sell when the market reverses at an appropriate selling point. This strategy performs well in oscillating or highly volatile markets and is associated with relatively controlled risks.
The Martin Gale strategy is somewhat similar to grid trading and is more suitable for medium to long-term oscillating markets, rather than trending markets.
For example:
In a bullish trading scenario, assuming the market is in a medium to long-term oscillating trend, the Martin Gale strategy involves continuous buying, similar to taking advantage of periodic dips. Traders may also consider increasing their purchase amount to capitalize on short-term opportunities when prices drop and sell for profit after a rebound.
Suppose an investor employs the Martin Gale strategy. They initiate their first purchase (initial order) when the Bitcoin price reaches $10,000. Subsequently, every time the Bitcoin price drops by 1%, they make additional purchases (adding to the position). For instance, they make the second and third transactions when the price reaches $9,900 and $9,801, respectively. By consistently following this process, the overall average buying cost is reduced.
If the Bitcoin price increases and reaches the set take-profit level, the system will automatically execute a selling operation, completing one trading cycle. It's worth noting that the take-profit level is dynamically adjusted based on changing targets.
Before initiating the trading strategy, investors need to set a take-profit percentage based on their personal expectations, which represents their desired profit ratio.
If investors wish to sell at a higher price, the trading cycle may be longer, meaning they will sell later. For example, in the above scenario, if an investor sets a 10% take-profit target, the take-profit price will be dynamically adjusted based on the average buying cost after multiple orders. When the profit reaches 10%, the system will automatically execute a selling operation, concluding the trading cycle.

How to Perform Contract Martin Gale Trading on DOEX?
Create Mode
In DOEX Contract Martin Gale Trading, you have the option to choose between manual creation and smart creation modes.
Manual Creation: This method is suitable for experienced investors. You can set parameters based on your personal market judgment. You have the flexibility to set parameters like investment amount and buying pace according to the market conditions.
Smart Creation: For regular users, it's recommended to choose the smart creation mode. The system considers historical market data and asset volatility, leveraging DOEX's AI algorithm to calculate and recommend reliable investment references, including investment amount and buying pace.
2. Trading Direction, Leverage, Trading Cycle, and Cycle Profit
In Contract Martin Gale Trading, you need to clarify the following concepts and set corresponding parameters:
Trading Direction (Long/Short): If you choose to buy and go long with the DCA robot, it will first purchase cryptocurrencies based on market conditions and then sell when the price reaches the take-profit target. Conversely, if you select the sell and go short DCA robot, it will sell when the price rises and then repurchase cryptocurrencies when the price falls.
Leverage: Leverage applies to both the initial order and additional orders. You need to set a fixed leverage multiplier for the entire trading cycle. Currently, the Contract Martin Gale strategy supports leverages of up to 20x, suitable for high-risk speculative investors.
 Trading Cycle and Profit per Cycle:
*Trading Cycle refers to the complete process from buying to selling in one trade. It includes the initial order, additional orders, and take-profit orders.
*The initial order is the first purchase order, and additional orders are used to lower the average purchase cost.
*The take-profit order is the last sell order within the trading cycle.
*Profit per cycle is the percentage of profit you aim to achieve within a full trading cycle. You can specify this percentage in the settings window.
Note:
A full trading cycle should have at least one initial order and one take-profit order.
The more additional orders that are executed, the lower the average purchase cost within the trading cycle.
3. Single-Take Profit Target and Take-Profit Price
The single-take profit target represents the percentage of profit you aim to achieve within a full trading cycle.
For example, setting a profit percentage of 10%. If no additional orders are made within the trading cycle, when the Bitcoin price rises to $11,000 during the cycle, the system will automatically trigger a sell order to achieve the set 10% profit target. However, if additional orders are made within the trading cycle, your average purchase cost will decrease, causing the take-profit price to dynamically adjust and decrease as well. In this case, as soon as the 10% target is reached, the system will automatically trigger the take-profit order.
The detailed calculation formula is as follows:
Long Position:
Take-Profit Price = Current Cycle Average Holding Cost x (1 + Single-Take Profit Target)
Short Position:
Take-Profit Price = Current Cycle Average Holding Cost x (1 - Single-Take Profit Target)
The Martin Gale strategy can help users achieve dynamic take-profit targets. This strategy combines user expectations with real-time market trends to execute profit-taking as soon as possible. It's important to note that when the system triggers the take-profit price and automatically executes the sell order, the current trading cycle ends and directly enters the next one.
4. Setting Stop-Loss for the Strategy
In Contract Martin Gale Trading, you can set stop-loss based on market volatility and your risk tolerance. When the average cost falls to the stop-loss target, it will automatically trigger a market order to sell, and the strategy will immediately stop. This is done to achieve timely stop-loss objectives.
The detailed calculation formula is as follows:
Long Position:
Stop-Loss Price = Initial Order Execution Price x (1 - Stop-Loss Percentage)
Short Position:
Stop-Loss Price = Initial Order Execution Price x (1 + Stop-Loss Percentage)
5. Conditions for Triggering Contract Martin Gale Strategy
The Contract Martin Gale strategy will be triggered when the latest market price either surpasses or falls below the trigger price you've set. If no choice is made, it defaults to immediate triggering.
In immediate triggering mode, after choosing to create the Martin Gale strategy, the trader will immediately start a new trading cycle. This initiates the execution of the initial order, followed by gradually completing subsequent additional orders according to the parameter settings until the final sell order is executed.

Please Note:
1. After creating the Contract Martin Gale strategy, the funds allocated for the strategy will be segregated from your wallet account and solely used for the Contract Martin Gale strategy operations.
2. Due to the volatile nature of market prices, there is a possibility of continuous price movements in the opposite direction, which can result in floating losses on held positions and potential liquidation risks. Therefore, it is strongly recommended to set reasonable stop-loss prices based on market conditions when creating the strategy, to minimize losses in unfavorable market movements.
3. During the operation of the Contract Martin Gale strategy, if unexpected events such as coin halts or delistings occur, the strategy will automatically cease execution. This is done to protect investor fund

Risk Warning:
Contract trading carries a higher level of risk and may result in significant profits or losses. Past profits do not guarantee future returns. In the event of extreme market price fluctuations, it is possible to have your entire margin balance liquidated. Please note that DOEX will not be responsible for any losses you may incur. Before participating in contract trading, please ensure you fully understand the associated risks and take appropriate risk management measures.

DOEX Team
August 24th

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