Topic: A Complete Guide for Cryptocurrency Newbies "The Best Way Of DCA" (Read 369 times)

Buddy, You have raised a good point here. DCA is good for the plebs and for those who get their funds as salary per month or by weeks so they can easily divide their funds into part and Do DCA for bitcoin accumulation. On the other hand, Lump Sum is best for those who have big amount available in their pockets and not need to look price of BTC all the time and as everybody want to speculate so somehow the big investers also look at price sometime to have big profit out of market. 

hmm, we can not get all the opportunity to buy all the dips because many of the newbies fell prey to FOMO by thinking that market will go more down and miss their good opportunity of current dip.


Indeed, So accurate.

DCA strategy is very good for people who just started their bitcoin journey and also for low income earners. Moreover, the DCA  method of accumulating bitcoin is for investors who have the passion to keep on buying to increase their portfolio in the long term. This is because you have the advantage to buy regularly maybe weekly or monthly regardless of the price of bitcoin.

This is because bitcoin increases in value as the time passes on and when you plan to hodli for long, in whatever price that you bought, you will make profit at the long run. This is the easier way to accumulate bitcoin with ease. My advice is that, if you have a big sum of money to buy bitcoin, it is better that you don't lump sum because bitcoin price might go dipper than when you buy. You should use the three method of accumulating bitcoin which is lump sum, buying at the dip and regular DCA.

You can share you funds into three parts and use one fraction to lump sum, use one part to continued with your regular DCA and keep the last part to buy at the dip. You will be able to increase your bitcoin investment portfolio faster than when you use the money to only lump sum, or for only DCA, or buying at the dip. It is hard to predict when bitcoin price will dip.

Sir, Many thanks for putting these lines here to make it more informative. As per my opinion, DCA is never about raising and declining. DCA is all about consistency, we have to buy both ups and downs to make a good average of our investment at the end of the day. We are using DCA (doller-cost averaging) as it is represented by its name, right?, to make a good average of our net cost, and my second point is that DCA is well situated for those people who do not have that much money to invest at one time like lump sum and receive their amount after one month as a salary.  



On the other hand, lump sum is well situated for the big investors, who really don't care about short-ups and dips. So, they go for the lump sum rather than DCA. Well, I'm not saying big investors should not do DCA or whatever they are doing; it all depends on their mindest as they sometimes play games to changes the market sentiments. So, they really don't care of these small shits.

At the end, I would like to say thank you for sharing your opinion here with us and also for being a part of this thread.

Kind Regards!

-snowpega-

I still feel that the better method of buying bitcoin is to wait till it crosses a set point that have observed over years as support level and drops even lower. A huge chunk of bystanders will buy in at that price and you will see the next support level build up very quickly and that is to be noted in the spreadsheet which you are using to keep track of trades.

Then the price can move sideways up or down, each has their own approach. If it drops, determine a second point to buy and proceed with that. If it goes sideways, just wait it out. If it goes up, sell after you have broken even.

You're speculating, and missing the most important thing:
You would have been better off buying lump sum in week 4, 5, 6, 7 or 8. In a way, DCA is trying to time the market, assuming it's going to drop. If that's what you believe, just wait. Some people are still waiting to buy Bitcoin at $200.

No doubt DCA is a very good strategy but for what? It can help newbeis to manage risk but in which asset? DCA is incompatible with every asset class, In risky markets DCA can optimize your outcome and risk management but specifically in Which Coin, you cant be sure except for Bitcoin. I think except for Bitcoin no one can without hesitation start accumulation.

Discussing Dollar Cost Averaging (DCA) within the crypto market inevitably leads us to Bitcoin. Cryptocurrency, a volatile landscape, primarily revolves around Bitcoin's supremacy due to its strong fundamentals.

Can any other crypto compare to Bitcoin's reputation and transparency? Most would say no. These fundamentals set Bitcoin apart.

Keep in mind that the effectiveness of DCA hinges on asset class selection. Applying DCA to "shitcoins" can lead to financial disasters. Even with top-performing assets, it's not guaranteed success. The exception is Bitcoin, but it still requires a good grasp of market dynamics and fundamentals for a successful DCA strategy.

It is now clear to me as you have given me clues on how to read further coupled with the link to further assist me in knowing how the trading looks like. At least I can be able to understand the mechanism on how the DCA works properly and also to build a strong base mentality and otherwise while getting engaged in it.

You are 100% right. I am well aware of the DCA strategy, and really, OP, you have done a good job in writing these points. It is not only helpful for the newbies but also helpful for the experts because DCA can be followed by anyone. It is a very simple and powerful strategy, just like you stated above. But when something is very simple, it becomes hard to understand, specifically for newbies. Because they think DCA is only about buying dips. While it is not.

I liked the point about other strategies that one should follow and not depend only on DCA. because DCA is especially for long-term investors and not for traders. Talking about holding and trading, do you even know holding and trading are two different things? Because in my sight, you are also a newbie and are just sharing what you learned here. According to your last reply in this thread,

Rebalancing is not that hard and can be set to automated, but one should have some good knowledge and funds too. I prefer one to do it manually at first, but when he feels like an expert, he might shift to automation.

From what I have observed is, OP was trying to share the knowledge which he has gained from this forum and wrote it in his own words. I am not saying that the OP has not read the content from some other place, because he must have read about DCA and all the points he talked about above from somewhere. Which I think would be wise for him to mention but it is not some quoted reply or a copy-paste thing where we need a source link (or is it --> asking from OP).

Plus, I don't think this post would be plagiarised, I am not an expert in this situation but all I can say, is if the OP is breaking a rule and proves to be a victim of plagiarization by Moderators or admins, then obviously he will be banned without any warnings.

But his posts have stayed here for some time, it's been 3 days, now. I think if something is wrong then he should be gone till now. Well, as we can see he stays here. So we should add value to the topic instead of fearing the OP's ace out. hehe. I hope no one would mind me. I just say what I observe.

What I can say is, to ask OP to add a few statements in the post, like the purpose of the post, and add a disclaimer at the bottom too. And dear OP try to spend more time on post content instead of making pictures on Canva. (haha)

Yes Sir i know the rule of this forum and never want to violate it anytime. Actually,  these idea come to my mind from the thread Buy the DIP, and HODL! there alot of my seniors members are talking about what is DCA DCA?? so thats why i came here to put some light on DCA strategy.


Well To be very honest alot of thing i have mentioned in this thread i learn from bitcointalk members and after that i did some research for the best results for my newcomers to understand easily as you can see the second picture i took from another website. This picture is the only thing i took from another website and i also added the source link . when you will click the image you will be redirect to the website from where i took the only one image.

First image i designed by my own From canva. Rest of that sir many thanks for the suggestions DCA for bitcoin i really forgot to add this part but you mentioned here.

regards

-snowpega-

OP must read
Unofficial list of (official) Bitcointalk.org rules, guidelines, FAQ

DCA is good to use with Bitcoin but not good to use with most of altcoins. Because most of altcoins lose their values with time and they even, worse, gradually die over time.

Of course, if anyone loves DCA altcoins, check this out, but I don't recommend to do this with new altcoins.
https://www.blockchaincenter.net/satoshi-cost-averaging/

The example he gave was for stocks, in which DCA may be profitable, but not to the same extent as Bitcoin, as the volatility factor in the price in Bitcoin is more pronounced than in stocks, and Bitcoin's cycles can be predicted every four years and are completely different from stocks, which often follow indicators. total economy.

In general, DCA makes all the profit at the time of sale, not like most trading strategies that depend on the date of purchase.

Source ---> https://dcabtc.com/
This is an example of how DCA could make losses if it does not calculate the sale date accurately.

After reading your article OP, I picked interest in it and wanted to further do more findings on your topic matter as it relates to trading. I like doing such when ever i pick interest in a topic that i come across here if such topic is rich in knowledge and information as this post is but it is not clear to me why you have failed not to put up the source for further readings as I believe not only me would be interested in this thread. I would advice you update this article of yours with the source so that one can read further and to avoid the being banned just as you have been cautioned above.

I feel as if you quoted your words from a source. If you do not include the source link, your account will be banned.
You are talking about DCA in general and not using it with Bitcoin, as there are some tips that reduce transaction fees and the possibility that the price will be high instead of investing at fixed times.
The bottom line is that it is a suitable method for long-term investment if you want to sell on the basis of cycles and not at any time.

Tbh I'm very new to the world of cryptocurrency and i was looking for such a familiar thread so i just stumbled upon this thread and really come to know useful things like as a newbie in Cryptocurrency and understand how to step in cryptocurrency.

I really don't know how much i need to invest in cryptocurrency.  As you mentioned DCA, it seems me like a smart and disciplined approach,

 The step-by-step instructions, along with  risk , emotional control, and long-term focus that you discuss, make it easier for me and newcomers to make decisions.

Introduction:

In the past few days, I have realized that many of the people like the DCA strategy for Cryptocurrency investment. So, I came here for my newbie’s members with depth and in an easy easy-to-understand way which may help them to increase their portfolio. I would say, for those who are new to the world of cryptocurrency, it may be difficult for them to decide like what should be their first step into the market as a newbie and how to navigate this difficult and often unpredictable market situation in the form of pumps and dumps. Well, the thing that really comes to my mind is that DCA is one of the smartest strategy for newbies to be adopted for good results. In this thread, we will study what DCA is, why it is a great strategy for newbies in the crypto world, and how to implement it more effectively. So, let’s Talk about DCA (Doller cost average) technique.


What Is DCA?
Dollar-cost averaging (DCA) is an investment strategy in the world of cryptocurrency where you need to keep investing a fixed amount of your money at regular intervals of time, no matter what is the current price of the asset you want to buy. This strategy makes you able to spread your investment over time and reduce the impact of market fluctuation. Like you can really overcome the dumps and pumps into good results whenever you take the average of it at the end of the day. DCA is well situated for the newbies in the world of cryptocurrency as well as the expertise of the market.



Reduce risk: As we’ll know that the Cryptocurrencies are well known for their price fluctuation. The price of each cryptocurrency changes its value from time to time. That’s why the DCA strategy is well recommended for newbies which can help to reduce the risk for one who is trying to time the market by making sure that he/she is buying both in upswings and downswings market trends. Additionally, DCA can be really helpful in reducing the average cost of all of your investments.

Avoid emotional decisions: The Cryptocurrency market is full of speculation, hype, and fear sometime these are created by fake social media news to catch the newbies in the traps. For those who have FOMO kind of issues, this strategy is well recommended for them to be adopted as DCA takes the emotion out of investing because of its regularity after some intervals. DCA investment schedule is a predetermined strategy. in this way, you can avoid your emotional decisions driven by market sentiment.

Best for Long-Term Focus: if you are a newbie and just started your accumulation of desired asset like (BTC) DCA strategy will encourage you for a long-term approach to investing, which is actually more rewarding than lump-sum approach. Instead of keeping an eye on daily price fluctuations, you just need to focus on your predetermined schedule means that the fixed intervals you decided to invest or take new entry into the market.



Set Your Budget: Keep in mind that as you are using the DCA technique. so, you need to determine your fixed amount for each interval that you can invest easily to take entry into the market. Let’s in case you are investing 10$ or whatever you can afford easily all depend on for each interval. Consistency matters here you need to be consistent here. This can be the best way for good average results at the end of the day.


I added this image for more convenience to understand how it actually affects your investment at the end of the day. Like in this picture which is the best way of investment Lump-Sum or DCA.


Select fixed time: In this part, you have to decide you periodic time when will you invest. It can be weekly or bi-weekly and monthly as well. It all depends on your financial situation like which time is more comfortable for you for taking entry into the market as I have aforementioned “It can be weekly or bi-weekly and monthly as well”

Focus on Your Schedule: Once you've decided your budget around with your fixed timing, then you need to stick with your plan. To get the best results in your average results at the end of the day while calculating your portfolio consistency is key to success in DCA strategy.

Prepare Emergency funds: To be very honest, I did not aware of this before but while having a deep discussion in the buy and hold thread I came to know about it from JayJuanGee and other mates in of the thread. Your emergency funds should be in your local currency that you can consume in any unexpected situation to overcome it.

 
Time to time Review of Your Strategy: Take a periodic review after some months, to evaluate your average while doing DCA strategy. You can make any necessary adjustments if need to see more good results. Doing it, is really helpful to increase your portfolio by changing your investment frequency based on your goals and market trends. Do it only if needed like if you are not seeing good results then do some kinda adjustment in your strategy.

Conclusion:
DCA is a simple but yet powerful strategy that can be really helpful for the cryptocurrency newbies to navigate the unpredictable behavior of the crypto market. By setting your budget, and consistently investing over time after the decided interval, you can reduce the risks associated with crypto investing because the market is sometimes in an uptrend and sometimes in a downtrend so you are buying both of them at your fixed intervals and it can really helpful to increase your chances of long-term success. Remember that, DCA can be an effective strategy, but besides that, there are more strategies like asset allocation, diversification, a regular portfolio rebalancing which you can also adopt. It all depends on your research so Do your own research before adopting any of the strategies.