Fixed dollars, variable units — that's the entire mechanism
Dollar-cost averaging works through one simple arithmetic fact: investing the same dollar amount every period means the number of units you buy varies inversely with price. When the price drops, your fixed $100 buys more units; when the price rises, it buys fewer. This isn't a market-timing strategy or a prediction about where prices are headed — it's a mechanical consequence of holding the investment amount constant while letting the price float, and it naturally tilts your average purchase price toward the periods when the asset was cheaper, without you needing to identify those periods in advance.
This tool models exactly that mechanism using a price series you supply, showing you precisely how much you'd have invested, how many units you'd hold, and what your effective average cost would be.
How average cost basis is actually computed
Each period, your fixed investment amount divided by that period's price gives you the units purchased that period. The average cost basis across the whole plan is total invested divided by total units purchased — not an average of the period prices themselves. This distinction matters: a simple average of prices treats every period equally regardless of how much was actually invested at that price, while the units-weighted average cost basis correctly reflects that you bought proportionally more units during cheaper periods, which pulls your average cost down below a naive price average.
A concrete example of the weighting effect
| Period | Price | Units bought ($100 invested) |
|---|---|---|
| 1 | $40 | 2.500 |
| 2 | $38 | 2.632 |
| 3 | $42 | 2.381 |
| Total | Simple average: $40.00 | Total units: 7.513, avg cost: $39.93 |
Running your DCA simulation
Set the recurring investment amount, such as $100 per week.
Pick the frequency: weekly, biweekly, or monthly.
Enter the price per period — one value per line, in the order your periods actually occurred.
Read total invested, units accumulated, average cost, and final value at the last price.
Why the average cost naturally lands below the simple price average
Modeling missed periods and fees without extra tooling
Leaving a price entry blank or invalid doesn't break the calculation — that period is simply skipped and counted as a missed investment, with no units purchased and no cash invested for that line. This gives you a direct way to model realistic gaps in a DCA plan (a missed paycheck, a skipped week) rather than needing a perfectly unbroken series. Trading fees aren't modeled separately in the default calculation, but the tool's structure supports two practical workarounds: reduce each period's investment amount by the fee percentage before entering it, or adjust each period's price upward to reflect the effective post-fee price you actually paid per unit — either approach folds fees into the existing calculation without needing a separate fee field.
DCA vs. lump-sum: what the comparison actually shows
The result card compares your DCA outcome against a hypothetical lump-sum investment of the same total amount placed entirely at the first period's price. This comparison surfaces a genuine trade-off worth understanding rather than treating DCA as automatically superior: historically, lump-sum investing outperforms DCA more often in markets that are generally rising over the investment period, simply because getting fully invested earlier captures more of that overall upward trend. DCA's actual advantage isn't a higher expected return — it's lower volatility exposure and psychological ease, since you're never risking the full amount at a single, potentially poorly-timed moment.
Common mistakes
Assuming DCA's average cost being lower than the simple price average means it always beats a lump-sum investment — the comparison depends heavily on the overall price trend across the period.
Entering prices out of chronological order, which would misrepresent which periods actually captured the cheaper buying opportunities.
Forgetting to account for fees at all, understating your real total cost by ignoring the erosion fees have on effective purchase price.
Treating a blank price line as an error rather than using it deliberately to model a realistic missed period in your actual investment plan.
Real use cases
Modeling how a recurring weekly or monthly crypto purchase plan would have performed against a historical price series.
Comparing a DCA approach against investing a lump sum upfront for the same total capital.
Estimating average cost basis for tax or portfolio tracking purposes after a period of recurring purchases.
Testing how gaps in a DCA schedule (missed periods) affect the overall average cost and final portfolio value.
Frequently asked questions
Q: What is DCA and why use it?
A: Dollar Cost Averaging means investing a fixed amount on a regular schedule regardless of price. It removes the temptation to time the market and naturally buys more units when prices are low and fewer when high.
Q: How is the average cost basis computed?
A: Total invested divided by total units purchased. Each period buys (amount ÷ price) units; all units are summed and the total cash invested is divided by that sum.
Q: What if I leave a price blank?
A: Blank or invalid lines are skipped — they count as a missed period with no investment. Use this to model gaps in your DCA plan.
Q: Does this account for trading fees?
A: Not in the default mode. You can model fees by reducing each period's investment amount, or by entering the effective post-fee price.
Q: Can I compare DCA to a lump-sum investment?
A: Yes — the result card shows your final value versus investing the same total at the first period's price. Historically lump-sum wins more often in rising markets, but DCA has lower volatility and a better sleep-at-night factor.
Q: Are my numbers uploaded?
A: No. The whole calculation is local. Your investment amounts never leave your browser.
Simulate your DCA plan now
Try the DCA Calculator. Earning yield on holdings too? Check the Staking Rewards Calculator and APY ↔ APR Converter. Estimating tax impact on gains? Use the Crypto Tax Calculator, or model steady contributions with compounding using the Investment Growth Calculator.
