DCA, dollar cost averaging, is the most recommended strategy in crypto and the most misunderstood.
What it is: buying a fixed amount at a fixed interval, no matter the price. 5,000 rupees of Bitcoin every month, on the 5th, for years. The point is to remove timing, and your emotions, from the decision.
What it is not: a way to buy the bottom. A DCA buyer bought at $126K last October, at $58K this spring, and at $83K now. The average is the whole idea. If you pause when it is red and double when it is green, that is not DCA, that is trading with extra steps.
Where it fails:
1. On the wrong asset. Averaging down into a coin that goes to zero just means you lost money more regularly.
2. Without a time horizon. DCA needs years, not weeks. Over 3 months it is just a few random buys.
3. Without a life stop. If the money is needed for rent, the plan is wrong, not the market.
DCA into things you would be happy to hold through a 50% drop. That rules out most coins, and that is the point.
Do you DCA, and into what? Curious how many are doing it with something other than Bitcoin.
Education only, not financial advice.
$BTC $ETH #DCA #Bitcoin #Investing
What it is: buying a fixed amount at a fixed interval, no matter the price. 5,000 rupees of Bitcoin every month, on the 5th, for years. The point is to remove timing, and your emotions, from the decision.
What it is not: a way to buy the bottom. A DCA buyer bought at $126K last October, at $58K this spring, and at $83K now. The average is the whole idea. If you pause when it is red and double when it is green, that is not DCA, that is trading with extra steps.
Where it fails:
1. On the wrong asset. Averaging down into a coin that goes to zero just means you lost money more regularly.
2. Without a time horizon. DCA needs years, not weeks. Over 3 months it is just a few random buys.
3. Without a life stop. If the money is needed for rent, the plan is wrong, not the market.
DCA into things you would be happy to hold through a 50% drop. That rules out most coins, and that is the point.
Do you DCA, and into what? Curious how many are doing it with something other than Bitcoin.
Education only, not financial advice.
$BTC $ETH #DCA #Bitcoin #Investing