DCA Calculator
Units accumulated and average cost across periodic buys, compared against putting the same capital in at the first price — because the comparison usually goes unmade.
- Total invested
- 6,000.00 USD
- Units accumulated
- 54.7241
- Average cost per unit
- 109.641
- Average of the prices paid
- 110
- Value at final price
- 6,566.89 USD
- Profit / loss
- +566.89 USD (9.45%)
- Same capital, all at the first price
- +1,200.00 USD
Note that average cost is below the average of the prices paid. That is not an edge — it is a consequence of buying a fixed amount rather than a fixed quantity, so more units are acquired when the price is lower. The comparison against a single purchase at the first price is included because it goes the other way in a rising market, and the two are often discussed as though only one existed. Linear interpolation is a model; real price paths are not straight lines.
Why the average cost sits below the average price
This is the part that looks like magic and is not. When you buy a fixed amount rather than a fixed quantity, a lower price buys more units. So the units you hold are weighted toward the cheaper purchases, and the average cost per unit comes out below the simple average of the prices you paid.
units = Σ (amount ÷ priceᵢ)
avg cost = total invested ÷ unitsMathematically this is a harmonic mean, which is always at or below the arithmetic mean. It happens on every price path, including ones where you lost money. It is a property of the purchase rule, not evidence that the rule worked.
The comparison that is usually missing
Discussions of DCA tend to show the averaging effect and stop there. The honest comparison is against the alternative use of the same capital, which is why the last row exists.
- Rising market — a single purchase at the first price wins, because every later buy is dearer.
- Falling market — spreading wins, because later buys are cheaper.
- Choppy, ending flat — spreading usually wins modestly, since the dips are bought more heavily.
Set the end price above the start and then below it, and watch the last row change sign. Neither approach is generally better; they are bets on different things.
What DCA actually reduces
Not risk in the sense of variance of outcomes — a spread position is still fully exposed once it is built. What it reduces is the consequence of one entry decision being badly timed, by making no single entry decisive.
That is a real benefit and it is worth being precise about, because it is often oversold into a claim about returns. The behavioural half is arguably larger: a rule that removes the choice of when to buy also removes the opportunity to not buy because it feels wrong, which is where a lot of damage happens.
The costs it does not show
- Fees per purchase. More buys, more round trips. Where a minimum fee applies, small buys are disproportionately expensive — see the trading fee calculator.
- Uninvested capital. Money waiting to be deployed is not exposed, which is the cost of the approach in a rising market and is already reflected in the comparison row.
- Path dependence. Straight-line interpolation understates what a volatile path would have accumulated.
Not the same as averaging down
Worth separating: DCA is a schedule decided in advance and executed regardless of price. Averaging down is a discretionary response to a position being underwater. They produce similar arithmetic and come from opposite places — one removes a decision, the other makes one under pressure. The break-even calculator covers the second case.
FAQ
Why is my average cost lower than the average of the prices I paid?
Because you bought a fixed amount of money rather than a fixed quantity, so a lower price bought more units. The average cost is a harmonic mean of the prices weighted by units acquired, and it is always at or below the arithmetic mean. This is a property of buying by value, not an edge — it appears whether the price path was good or bad.
Does dollar-cost averaging beat investing all at once?
It depends entirely on the price path, which is why this page shows both. In a rising market, buying everything at the first price wins, because every later purchase is more expensive. In a falling or choppy one, spreading purchases wins. Neither is generally superior — what DCA reliably reduces is the consequence of being wrong about the timing of a single entry.
Why does the calculator use a straight line between two prices?
To keep the inputs to something you can actually supply. Real price paths are not straight, and the result for a given start and end price depends on what happened in between — a path that dipped deeply and recovered accumulates more units than a straight line to the same endpoint. Treat the output as a reference case, not a simulation.
Does this include fees?
No. Frequent small purchases pay fees more often, and where a venue charges a minimum per trade, splitting a fixed sum into more purchases costs proportionally more. If your buys are small relative to the minimum fee, that cost can outweigh the averaging benefit — the trading fee calculator covers it.