Best strategy for Dollar Cost Averaging

dunfida

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Quote from: Stepstowealth on January 25, 2023, 12:52:08 PM

I have searched and seen that;

Quote

Dollar-cost averaging is the practice of systematically investing equal amounts of money at regular intervals, regardless of the price of a security.

What is your best strategy for Dollar Cost Averaging, do you do it weekly, monthly?
What do you advice and why?

https://www.investopedia.com/terms/d/dollarcostaveraging.asp

Depends on you since you do know on how big is your funds and you do know on how you do make out such partition whether it would be purchased in small percentage with those price decrease increments or would really be tending to buy all on a certain point and we do know on how DCA do looks like on keep buying whenever the price is dipping even more.It does really matter on how much money you are allocating
or budgeting on the time that you do make out such move.Not all does have the funds and not all does have the capacity on whatever things that they are dealing with
specially if it does need up money.

stompix

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Quote from: palle11 on January 29, 2023, 09:14:33 AM

Sorry you have just shared the same idea as I did. I'm sure nobody likes chasing high price or ATH for DCA. Yes if you have to have a particular price in mind as the range you want to DCA then it is still same point and idea that I shared. IMO, I don't like highs for DCA and I think likewise more hodlers don't too. So doing an analysis to wait for price getting there is part of trading also and DCA is either considered as hodling or trading depending on what you have in mind and when you decide to sell.

You do still not understand what DCA is, you're still trading, no matter how you put your average, or your budget, if you choose a moment for your weekly purchases depending on the price this is not DCA, it's pure speculative trading.

DCA means you have the same amount of $, at regular intervals, no matter the price!
So if you have made 10 purchases every Monday of $100, you're not going to wait till Wednesday because the price might be lower and you're going to buy 300 worth of BTC, that no longer fits the DCA model. The whole thing behind it is to not care about the current price and only with the future goal in mind, trying to catch the bottom every week just involves the stress DCA was supposed to get rid of!

palle11

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Quote from: KingsDen on January 28, 2023, 05:12:28 PM

Quote from: palle11 on January 25, 2023, 04:21:59 PM

Quote from: Stepstowealth on January 25, 2023, 12:52:08 PM

What is your best strategy for Dollar Cost Averaging, do you do it weekly, monthly?
What do you advice and why?

The best for DCA is not to do it by random or weekly or monthly as you said but you need to do an analysis on your own first to check your support and resistance levels and then monitor through the chart to see where price will probably move to before you go in. Basically, it is good that you DCA when the price has dropped because you will have more chances of profit than when you buy on the high after price has broken for bull direction.

The concept you described is not the concept of DCA.
Dollar cost averaging doesn't permit that you stress yourself watching the chart and deciding points to enter the market or not to enter.
DCA is an idea that is birthed in order to help you invest in the market when you don't know the next direction of the market. If everyone knows where the market is going, no one will do DCA.
So, DCA can be a buying process which is targeting a particular range of price. Until the desired price is gotten, you keep buying in intervals

Sorry you have just shared the same idea as I did. I'm sure nobody likes chasing high price or ATH for DCA. Yes if you have to have a particular price in mind as the range you want to DCA then it is still same point and idea that I shared. IMO, I don't like highs for DCA and I think likewise more hodlers don't too. So doing an analysis to wait for price getting there is part of trading also and DCA is either considered as hodling or trading depending on what you have in mind and when you decide to sell.

KingsDen

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Quote from: palle11 on January 25, 2023, 04:21:59 PM

Quote from: Stepstowealth on January 25, 2023, 12:52:08 PM

What is your best strategy for Dollar Cost Averaging, do you do it weekly, monthly?
What do you advice and why?

The best for DCA is not to do it by random or weekly or monthly as you said but you need to do an analysis on your own first to check your support and resistance levels and then monitor through the chart to see where price will probably move to before you go in. Basically, it is good that you DCA when the price has dropped because you will have more chances of profit than when you buy on the high after price has broken for bull direction.

The concept you described is not the concept of DCA.
Dollar cost averaging doesn't permit that you stress yourself watching the chart and deciding points to enter the market or not to enter.
DCA is an idea that is birthed in order to help you invest in the market when you don't know the next direction of the market. If everyone knows where the market is going, no one will do DCA.
So, DCA can be a buying process which is targeting a particular range of price. Until the desired price is gotten, you keep buying in intervals

Silberman

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Quote from: Stepstowealth on January 25, 2023, 12:52:08 PM

I have searched and seen that;

Quote

Dollar-cost averaging is the practice of systematically investing equal amounts of money at regular intervals, regardless of the price of a security.

What is your best strategy for Dollar Cost Averaging, do you do it weekly, monthly?
What do you advice and why?

https://www.investopedia.com/terms/d/dollarcostaveraging.asp

The reason to perform a DCA strategy is to avoid the pitfalls in which traders fall when trying to time the market and enter at the very bottom, so it does not matter at all if you perform your purchases on a weekly or a monthly basis, just make sure that you save your money and then invest it in bitcoin with regularity, if you can do this and maintain it for years then your profits will be impressive and the specific interval at which you performed your DCA strategy will be irrelevant.

ethereumhunter

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Before you invest in bitcoins using the Dollar Cost Averaging strategy, you need to determine how much money you will use, how long you should invest, and when you invest (daily, weekly or monthly).

For example, you prepare $ 10k, the investment period is 2 years, and you invest every month. During those 2 years, that means there are 24 months so for each month, you spend approximately $ 416, no matter what the price is in the market. You keep buying bitcoins with that money for 2 years and after 2 years, you stop investing and wait for a reversal of the bitcoin price to make a profit.

Or if you get a monthly salary and are willing to set aside $ 100 to buy bitcoins for 2-3 years. There are many ways you can use the Dollar Cost Average strategy and you can choose which one you like.

sulendra12

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Quote from: Stepstowealth on January 25, 2023, 12:52:08 PM

I have searched and seen that;

Quote

Dollar-cost averaging is the practice of systematically investing equal amounts of money at regular intervals, regardless of the price of a security.

What is your best strategy for Dollar Cost Averaging, do you do it weekly, monthly?
What do you advice and why?

Pretty sure it just depends on your ability and capability of your money to buy it weekly or monthly. If you can do it consistently then that's much better in my opinion, because the article says "regardless of the price" so it doesn't matter when you do it but please do it consistently because that's the main point of this strategy.

Quote from: jaberwock on January 27, 2023, 07:43:32 AM

2 years of DCAing is quite long but I think there will be bull runs already that will come within this period so it's inevitable that one must sell but this is a good idea so that we will have another set of funds for another round of DCA's.

2 years isn't that long considering if you are using DCA as your main strategy.

carlisle1

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Quote from: worle1bm on January 27, 2023, 12:46:51 AM

It's good strategy to accumulate coins with you overtime if you don't have sufficient funds to invest at once.This is applied by many traders by putting fixed amounts weekly or any time period they find suitable but for me it's good if you have say 2+ years in mind that will help you get some good amount with you but don't invest too small amount that would not cover even the tx fees say make it above $10 for best.

Yes, it's a good strategy to set your buying in a fixed amount and let it continue with your set time frame, it can help you to save up
and once the market gives you a good pump your earnings will be decent.

It's up to your judgement if you will manage to continue saving and buying your target assets and let it grow for the time that you intend to save.

planning and executing if you manage to do that the chance of making good benefits is not by far.

o48o

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Quote from: Stepstowealth on January 25, 2023, 12:52:08 PM

What is your best strategy for Dollar Cost Averaging, do you do it weekly, monthly?
What do you advice and why?
-cut-

I do it weekly, or when even i have extra money to invest i put some of it in crypto. But lenght of the intervals aren't really important. Important thing is that you are doing it constantly because you see that something is worth investing. That no matter the price now it's probably safe bet in the end.

I have bought crypto since start of 2014 and still keep buying it. Not saying what cryptos exactly as everyone should make their own choices.
But i have also sold it no matter the price really. As i am using it for living. I like to have my wealth i am using tied to crypto instead of fiat money. I am not sure if that's smart and in some cases it has not been, but i am a believer of it and price is comes secondary.

Lanatsa

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Quote from: 2double0 on January 27, 2023, 06:33:27 PM

According to my thinking, doing DCA is not something that needs to be done on a timely basis, but based on how precisely it is timed.
There are SR levels that we can see on the charts each time a specific value is reached, but DCA depends on whether the price will bounce back from the least value you've bought it from, or not. It will not be useful if the market keep going against you. There are specific support levels where certain traders set their buys and wait for it to be triggered, then if it breaks down the support and tries to find a different support downwards, they buy additional coins from some % of their portfolio, so division of your portfolio is what makes DCA a perfect or imperfect way to gain/lose money in whatever you trade.

Yes this would be on timely basis and also this cant really be just for you to easily put up your funds without any basis and it would be normal that you would really come after for those most cheapest option or price to enter which you would be able to accumulate more.Even though you are really that going for long term but its impossible that you wouldnt mind about the maximum profitability which you could be able to make
if you have entered into a low spot but since the price is something that we cant predicted then we do just tend to get in into random numbers but well it doesnt mean that it would a hindrance
because we are really that going for long term.

2double0

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According to my thinking, doing DCA is not something that needs to be done on a timely basis, but based on how precisely it is timed.
There are SR levels that we can see on the charts each time a specific value is reached, but DCA depends on whether the price will bounce back from the least value you've bought it from, or not. It will not be useful if the market keep going against you. There are specific support levels where certain traders set their buys and wait for it to be triggered, then if it breaks down the support and tries to find a different support downwards, they buy additional coins from some % of their portfolio, so division of your portfolio is what makes DCA a perfect or imperfect way to gain/lose money in whatever you trade.

pawel7777

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Quote from: tbct_mt2 on January 27, 2023, 10:20:59 AM

DCA is for real investment, very long term so I don't think using exchanges to store your bitcoin through DCA is a good and safe idea. Storing bitcoin you buy and DCA to your non custodial wallet, not exchange wallet.

That's true, you shouldn't be holding all your coins there, but trusted exchanges are still the best way to do DCA if they offer automatic, recurring purchase options. Without that, you'd have to do it manually say each week or month, so it'd be pretty hard to keep discipline.
Then, every now and then, when the amount getts bigger, you could withdraw to the non-custodial wallet.

Quote from: stompix on January 27, 2023, 03:44:01 PM

...
That calculator is broken
...

Good spot! Thanks

Kelvinid

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I consider the price and fees when doing this. Usually, I buy some when the price is down and there is no time frame as long as you could think that it was the best timing. Most important is that we are on our plan "buying low" because what need is to take advantage of the market decline and we can do this any time of the day as long as we still have the money. We can do this monthly or weekly, but that will happen if we already know the market trend, unfortunately, we don't know.

stompix

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Quote from: pawel7777 on January 26, 2023, 04:49:12 PM

Run a quick simulation on dcabtc.com, results are not surprising, buying frequency made very little difference. The results for "monthly" are a bit distorted as the site doesn't allow to enter $ amount with decimals, so used $30 instead of $30.4.

	3 years	9 years
$1 daily	$2,112	$130,873
$7 weekly	$2,141	$131,053
$30 monthly	$2,169	$130,833

That calculator is broken

Bitcoindollarcostaverage
USD Total Spent $1,113.00
Today's BTC DCA Value $1,382.70

Crypto head:
Invested $ 1,106
Total Accumulated $ 1,360 +22.97%

Dca-cc
Total Investment $1,099
Value in FIAT $1,332.83 +21.28%

Same for the 9 years, it's not $131,053 but $ 72,906.
It's also funny since if you select the last two years it still gives you a profit, while obviously you would have lost money in this period

ajiz138

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Quote from: ShowOff on January 27, 2023, 03:00:07 PM

Every week or every two weeks or maybe every month of DCA it doesn't matter. The main thing you need to think about is how you have the money to do it. You can save month's salary at the end of the month, and you do DCA at the beginning of the month because at that time you can plan after you receive another salary for the new month.

Income and expenses must be adjusted but for each month after receiving the month-end salary I think this is what many people often do if they can't afford the weekly DCA, so far I can still do it with the weekly DCA but it's true I really have to be able to manage finances which is entered and re-entered into the DCA, while separating other needs must also be considered carefully.

Quote from: ShowOff on January 27, 2023, 03:00:07 PM

So far I have been inconsistent about time, depending on how I get money because not all of my budget comes from my monthly salary to invest. Then I started to consider some altcoin as well, it was to diversify assets instead of just on bitcoin.

It has to be adjusted as needed because we are always different in how we do it, often someone does DCA when they get from trade results, airdrops or even from signature campaign paydays, most importantly they can put it into bitcoin even though it's only a little he can , but for me to diversify not in altcoins at the moment only one bitcoin is my long term handle with the DCA method.

ShowOff

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Every week or every two weeks or maybe every month of DCA it doesn't matter. The main thing you need to think about is how you have the money to do it. You can save month's salary at the end of the month, and you do DCA at the beginning of the month because at that time you can plan after you receive another salary for the new month.

So far I have been inconsistent about time, depending on how I get money because not all of my budget comes from my monthly salary to invest. Then I started to consider some altcoin as well, it was to diversify assets instead of just on bitcoin.

maydna

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Quote from: Stepstowealth on January 25, 2023, 12:52:08 PM

I have searched and seen that;

Quote

Dollar-cost averaging is the practice of systematically investing equal amounts of money at regular intervals, regardless of the price of a security.

What is your best strategy for Dollar Cost Averaging, do you do it weekly, monthly?
What do you advice and why?

https://www.investopedia.com/terms/d/dollarcostaveraging.asp

I do a monthly Dollar Cost Average strategy by investing a small amount of my money, and I keep the BTC in my wallet. It worked to my advantage a bit when the price of BTC went up like it is now. But I'm still trying to collect more BTC because once the price goes up, I can see my real profit. And setting aside some funds to buy BTC can help me to collect more BTC. I also use trading to make profits in BTC, even though the profits are small.

tbct_mt2

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Quote from: Husires on January 27, 2023, 08:31:19 AM

Dollar Cost Averaging is a strategy in which the factor of time and price disappears in trading, and therefore it depends on choosing fixed times for trading so that its average is profitable in the long run, and therefore you must buy at times when the price is high or low, which means that if you just want to follow it, I must ignore both staff.

With Dollar Cost Averaging strategy, you don't have to time the market.

Just work, get salary and use part of your salary for DCA. If there is things to time, time your job deadlines and salary receiving days in order to allocate money for DCA better.

Quote from: pawel7777 on January 26, 2023, 04:49:12 PM

Run a quick simulation on dcabtc.com, results are not surprising, buying frequency made very little difference. The results for "monthly" are a bit distorted as the site doesn't allow to enter $ amount with decimals, so used $30 instead of $30.4.

	3 years	9 years
$1 daily	$2,112	$130,873
$7 weekly	$2,141	$131,053
$30 monthly	$2,169	$130,833

Bitcoin ROI charts. and data tables represent very good profit from Bitcoin investment after a few years of DCA and hodling.

Husires

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Dollar Cost Averaging is a strategy in which the factor of time and price disappears in trading, and therefore it depends on choosing fixed times for trading so that its average is profitable in the long run, and therefore you must buy at times when the price is high or low, which means that if you just want to follow it, I must ignore both staff.

To improve it you can develop the skills of choosing the right platform, choosing the right time for withdrawals, how to reduce withdrawal fees, minimizing the tax impact and choosing the right day (eg Sunday is often an excellent day to buy.)

You can use it with several strategies to maximize your profits, but then it will be part of your trading plan and not a specific strategy.

Scripture

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Quote from: worle1bm on January 27, 2023, 12:46:51 AM

It's good strategy to accumulate coins with you overtime if you don't have sufficient funds to invest at once.This is applied by many traders by putting fixed amounts weekly or any time period they find suitable but for me it's good if you have say 2+ years in mind that will help you get some good amount with you but don't invest too small amount that would not cover even the tx fees say make it above $10 for best.

DCA seems to be the trend during the bear market as many prepares for the green days and I agree, its also good to have a good amount of money to invest every time, because if its just a small amount of money like a $10 below, they it might not be worth it because of the fees. Anyway, I also practice this and so far I'm being consistent and didn't have any problem committing on this, maybe its because I have a good budgeting and this is very important if you want to succeed in DCA.

Topic: Best strategy for Dollar Cost Averaging (Read 263 times)