Topic: Buy the DIP, and HODL! - page 81. (Read 121923 times)

There must be some income weekly or monthly dedicated for investment in Bitcoin. Once share for Bitcoin is finalised one has to cut his extra spending's if he want to regularly invest in Bitcoin. One can made cut on some dinners at restaurants or what ever he thinks is extra spending. If you never cut your spending's then you can't find cash for Bitcoin. Having said that if we do a sacrifice on our extra spending's today then there is bright chance that our future will be bright. If someone has any doubt about that then he must refer to Bitcoin historical price chart. 

There are a lot of ways that a person could end up "overdoing" his investment into bitcoin in a lump sum form without necessarily dipping into any backup funds, and he might even had completely stayed within his discretionary fund too, and still ended up overdoing it in terms of other options that might have had been available to him.

My point is that a guy might come to various kinds of balances within his budgeting and his authorization, and even if we go with an example of a guy who might have gotten into bitcoin with $12k of available funds, and he had $200 per week that he could buy bitcoin with his regular salary through DCA and he also has sufficient backup funds (emergency, reserves and float), and so instead of dividing his extra $12k into three parts (DCA, lump sum and buying on dip), he decides to invest all of the $12k right away, and so in that example he is totally within his discretionary income and within his range of options to invest all of the $12k right away... and there is nothing really wrong with his choice, but then when the BTC price goes down instead of up, he might have regrets that he had not planned more deliberately and accounted for either price direction.. So the level of his "overdoing it" still is not really damaging him in any great way, but he just had not realized his mistake until the price went down and then he realized that he had not even really thought about preparing for that possibility with the extra $12k that he had, and so he can still buy $200 per week with his regular DCA as compared to with other options that he would have had available if he had at least considered dividing the $12k into 3 parts, and I am not even saying that there is any exact correct answer since a guy could still consider the dividing the $12k into three parts and still come to a conclusion to buy $12k worth of bitcoin right away and have his $200 per week DCA amount serve as any kind of buying on dip that might end up happening..



You are not wrong.  You are just using a more extreme version of making a mistake than what I had suggested to be the scenario, especially since guys can purposefully choose to overinvest in a kind of lump sum way, yet without tapping into their back up funds or even going beyond their discretionary income, but then still realizing that they had overdone it in terms of their own standards, so they won't necessarily have a lot of losses from the mistake, but might realize that the next time that they get a lump sum amount of money that they are able to invest, that they consider the three options, and sure, maybe in the future, they might still invest $9k of the $12k right away and only put $1,500 into each of the categories of buying the dip and adding to their regular DCA for 3 months or whatever period they decide to divide out the $1,500 that they are adding to their regular DCA amount - maybe it is 15 weeks (add $100 per week for DCA).. and then maybe with the buying on dip, they spread out $300 buy orders every $2k drop for the next $10k. whether the BTC price is going to drop or not, that is how they decided to allocate their buy on dip amounts.. so they end up still feeling better about their whole decision regarding how to treat the allocation of their extra $12k lump sum amount with only $9k of it being used to buy BTC right away, rather than $12k being used to buy BTC right away.


When a guy is fairly early on in his BTC accumulation journey, he may already have established a DCA amount that he is doing regularly, and even if he is first getting into bitcoin, he might start with a lump sum and want to decide how to allocate that lump sum and whether he might also consider to continue to DCA too, since it is a bit more burdensome to attempt to front load or to even loan against his regular cashflow, and so a guy might get eager to get into bitcoin and to have some kind of a front loading into the bitcoin investment in order to prepare for up.. .. yet at the same time, he has to consider his own limits in terms of how much to maybe hold in reserves and if he considers that his regular DCA ($200 per week in my above example) is going to cover any of his concerns for dips. 

So then the brand new investor might be in a bit of a different position in terms of how to treat any lump sum amounts that he might have available, as compared with the investor who might come across extra money 6 months to 12 months to 24 months after he had already been investing in bitcoin, since the one who gets some kind of extra lump sum amount later down the road, his already having had established some kind of a bitcoin accumulation amount, might contribute towards his feeling less urgent about any need that he might feel to have about preparing for UP as compared to a newbie who might not hardly have any BTC already purchased.  Any of the levels of BTC accumulation already done could still result in a guy making mistakes in his calculations and maybe overdoing his investment and then realizing that he could have had divided it up differently, even though there is no perfect answer, there are some answers that are more suitable to his actual situation, and it is better if he considers the three categories, even if he might still be weighted towards one part or another partly depending on how many coins he already had accumulated.


A minimum investment amount likely would work better for those in their earliest times of getting into DCAing and perhaps even someone who is also relatively passive and whimpy, so forcing themselves to invest a certain amount every week no matter what.  So then yeah, the one who might add to the DCA amount during some weeks and then just keeping the regular minimum investment amount no matter what, those persons could also have weeks where they are able to be more aggressive in their BTC investment including supplementing their weekly DCA amounts, as you mentioned.


For sure, there are levels of cashflow irregularities, and some of the irregularities are within predicted parameters such as changes in expenses or even 1 or 2 surprise bills that might end up being covered by float and/or by reserve funds without having to dip into emergency funds and/or without having to even make adjustments to the minimum DCA, if that amount had been set for $50 per week.

Other cases of a lost job may or may not end up resulting in the need to discontinue DCA, depending on the extent to which reserves might be sufficiently present and the odds of getting another job within a time frame that any of your funds might still be sufficient, but yeah, there could be situations in which the funds are not sufficient and the prospects of replacing the income from the job might not be high, and that might call for much more drastic measures, which include discontinuing or lowering DCA amounts... I tend to think that any time emergency funds might start to get dipped into, then DCA would have been cut prior to dipping into emergency funds, but surely guys could have different parameters in terms of how to treat the matters, and how much depletion of funds require more drastic measures.


Of course, we set our own rules and parameters which we can amend from time to time based on our priorities, and some guys might consider rolling over of funds from week to week to be o.k, and other guys might not tend to allow rolling over absent certain circumstances that he finds acceptable.   Some guys might be used to having a lot of jobs and cashflows, so they might not get too worked up about the loss of any of their cashflows, but if they get injured and all of their cashflows dry up, they might have to reconsider their own past practices, including that some guys do not keep much if any backup funds because they consider their various sources of cashflows to be sufficient as back up funds, which might not end up working out so well for them if some unexpected circumstances might end up causing more of their cashflows to dry up than they had anticipated to be likely.

There could be guys who are pretty loosey goosey with all of their rules, yet they still might know that if they end up dipping into a certain amount of money that they have on reserves, then it becomes time for them to start to buckle down and become more strict with their spending until they return back up a certain amount of funds that they keep as their cushion or their layers of cushion... their cushion might be strictly in cash, or they might have other places that they hold their cushion, but if they end up having to use some of their cash, then they know that they have to access some of their other cash that might have a time delay in retrieving it.. .. so warning bells go off at certain thresholds of using up cushion/backup funds.

I don't know when you join the discussion but just so you know, there are concepts recommended for anyone who want to invest in Bitcoin that will enable them invest in such a way that they can hold comfortably without yielding to the pressure to sell. One of such concept is setting up emergency funds, which is a fund that will cover unplanned things that can require the investor to settle during the course of the investment. This emergency funds is different from the money meant to cover the basic needs such as food, shelter and others. Emergency fund is entirely different and must be set asset as a protection of the investment because without it, the investor might sell his Bitcoin when there is emergency that cannot wait. So the planning process is where the emergency funds are accounted for.

An investor waiting for the dip would have made provisions for the funds different from the emergency fund and even the amount for DCA for those also applying the DCA. Investment is better planned so that it can be implemented adequately

I never think like that about other people's plans and income through anything because everyone is always free to use their own income for whatever they want because when they go bankrupt and feel difficult, they also do not ask for help that is so meaningful to us. But your suggestion to invite more people to invest in Bitcoin by mapping their own income so they can invest better is a very good suggestion and I also quite agree with it.

But you also need to know that current investors who have been involved in Bitcoin investment for quite a long time must always map their own income every month so we cannot judge everyone as having made a mistake by not evaluating their income. Because smart investors will always do this and will not spend money carelessly on unimportant things or on things they don't need in their lives.

One needs to keep his or her self in check, one don't need to use money anyhow with proper planning, before you thinking about taking advantage of the dip first of all check if after using above your regular percentage for investment if it will affect you financially and if yes avoid that particular dip and focus on your normal investment strategy to avoid getting into a fuck you state which will now lead you to dip hands into your investment.
Some people don't plan out how there salary or income will run for that week or month, they spend without proper evaluation and that is why they always go broke even before receiving there next salary, which is not a good one and I think we should encourage every investor especially the newbies to always map out how there income will run for the week or month how to fix in there income percentage to every place needed.

Nice instances you've go there, but in my own reasoning, the only scenario that has to actively affect the investor's accumulation journey for a period of time is when the investor looses his source of livelihood, then he might take a temporal break until he gains his ground and resumes his accumulation journey.

Addressing that of when the investor has a lot of expenses or was not able to buy at the base price as @Sticky Bomb illustrates, the best thing is to buy as much as he can for that week and note down the makeup amount and roll it over to the next week or thereabout, maybe he was able to buy $30 worth of bitcoin for this week, then in his accumulation record book, he should push the balance to the next week indicating a purchase of $70 to offset the previous week if he is still able to maintain that base price, where he cannot, he should be adjust the base amount to any amount he is comfortable with. the most important thing is to set standards and follow suit to maintain discipline and consistency in the accumulation journey. Base price is a rule and can be amended to suit the investor's capacities.

The most Important thing is that he does not stop buying, remains disciplined, committed and accountable to himself and does not leave his accumulation journey to chances but follows some standards set by him to guide him in the accumulation journey. It is good to always know what you are expecting from yourself  and it will motivate you to do even more than average, there is a saying that if you aim for the moon, even if you are falling, you fall among the stars meaning that worse comes to worse, he settles for the base price.

Of course, it is good to assign a fixed amount from our discretionary income into regular buying of bitcoin through DCA weekly or monthly but sometimes this might not be possible because it is not of our own control but based on our expenses that arises in different weeks. If you observe sometimes we might spend more than what we budget for the week due to increase in our needs for that week and sometimes we might spend less due to decrease in our weekly expenses.

In such scenarios the investor might choose to invest $50 weekly but when the expenses of his needs increases, he can cut down his DCA amount to $40 for that week and if his expenses on another week decreases, he might increase his DCA amount to $60. The most important thing is that the investor did not stop buying but continues buying no matter how small he could buy in a week.

Also an investor might have an increament in his monthly income, or has an additional means of income along the line of his bitcoin accumulation journey, he will increase the amount that he is using to DCA in order for him to buy bitcoin more aggressively as long as he did not over do it.

There can also be a case where an investor did not have any discretionary income on that week because of too much responsibility for the week and his discretionary income was exhausted, such investor don't need to worry that he did not buy bitcoin for that week and he will just hodli and buy the next week. Another scenario is if the investor loses his job at that moment, he is to pause his bitcoin accumulation until he gets a new job while he feeds with his emergency funds and reserve for the main time till he gets a new job and continue accumulating. If you have the funds to keep on buying don't stop just keep on buying.

Sometimes this is the reason why those people break out, since they think that those threshold they wait is already a good price to hit then accumulated. While there's certain situation where market dumps more and this scenario make those people scare and decide to dump since they can't take to see more negatives coming their way. So in this cases they should know that situation like this really happens that's why sometimes its no sense to wait for the dip since since it will just bother and can affect their decisions. That's why I would agree for some people say that its good to accumulate when you are ready and have funds to spend since even if bitcoin would dump more, we are still fine since we can accumulate at what bitcoin price level reached.

There's no really exact formula on this that's why they just need to be consistent on the actions they made so that everything would be fine on their investment. Because if they keep waiting for the dip then,  they might miss some opportunity to add some balance on their holdings. Maybe they might carried away by more dump then get afraid to buy since those waiting game that they do became one of the reason to lose their confidence to continue.

In my opinion, those who consider the price of Bitcoin before investing are those who do not have enough money or are afraid of losing the money they are going to invest. No one would be happy if they lost their money investing, but they already understand the risk involved in Bitcoin trading, which is why they aren't afraid when the price is down, what I would like some people to understand about Bitcoin is that it's worth is different from other kinds of investments that people have lost their money. However, I haven't heard of someone who's a professional in Bitcoin investment complaining that they lost their money, except they weren't advised by the right person before starting the investment.

When someone has the money and knows the risk involved in Bitcoin investment, they are free to buy as much as they can regardless of the price, even though the Bitcoin price is unpredictable, and nobody has any idea how high it will be in years to come, everyone who invests believes that the Bitcoin price will rise more than we can think.

You sure you really went through what you typed because I don't see DCA controlling buying price, it's just a strategy of buying Bitcoin  on regular intervals the price entry doesn't really matter when you buy using the strategy(DCA) .
However, buying of DIPs can just be more like a boost to your investment which shouldn't stop your DCA in the first place, if  you are capable of it then go for it when there's a Dip and the current market is an example of a Dip, DCAs at the moment is just like buying DIPs so if you have extra funds you can buy more DIPs or just stick to only  DCA...

Scalping as I know is one of the most risky trading strategies to use in trading because it encourages multiple positions at a time and you can lose so much funds within just second. In fact, in terms of guaranteed profit making, trading entirely can't be compared to investment hodling towards a long term target or plan.

You don't lose under bitcoin hodling as you would do in the trading aspect. The only conditions to losing in long term hodling investment is when the investor become anxious and impatient to hodl and sell off his asset prematurely probably out of FUD. 

I am believing that you are HODLing because deep down you know it's the safest way to accumulate and grow your bitcoin portfolio otherwise you would have divested the whole of your asset into trading if it was that much better than hodling for long.

There is a different between Lump sum, buying at dip and also DCA method, and in lump sum it doesn't targets the dip to invest all at ones on the contrary it can be use at any given price of the Market so if it happens that your plan of lump sum falls during when the Bitcoin price is on dip that will be an advantage for you, in other words any price is good so long as you are lump suming, meanwhile I see lump sum to be somehow related to the DCA method in the aspect of buying at any price but the difference is the nature of there investment, however your understanding about lump sum seem to be channeling on the buying at dip since you are pointing out that they should reserve some of the funds from the lump sum to be use during the dip.

I really feel there should be a base amount when DCAing, sort of an amount you should not go below, so as to put yourself in check and foster continued discipline and commitment in your investment. This comes from the knowledge that the human mind is cunny and can overly adapt to a pattern and possibly exploit it to the disadvantage of the individual, so for example, If you set a base, lets say $50 and you know that you can afford it weekly as a minimum, at some times when you have more cash with you you can invest $70, $100 or even more provided you have made accurate plans for  the next week's minimum of $50 to fall in place. you are better off than someone who invests $200 this week and possibly $20 next week, $30 in two weeks time as he can even decide not to invest in a week citing and deceiving himself that he has invested much previously.

This will help you become more disciplined and consistent investor over a long period of time as against investing randomly without an investment guideline for yourself and the guidelines would help you succeed in your investment journey with ease as it tends to be part of you overtime and as a committed investor, the more your earnings increase, the more you raise the bar on your minimum investment and the more bitcoin you would accumulate over a long period of time.

You are right. What I feel is the main issue of waiting for the dip is the aspect of misleading opportunities and psychological stress. No prediction is accurate as you mentioned. The more effective strategy for many investors has been DCA because they do not have to go through the idea of focusing and waiting for a specific decline in the price of Bitcoin. Having a long-term perspective will remove our mindset from short-term price fluctuation and this is something that most investors fall victim to.

One of the golden rules of investment is 'understand your financial strength'. It's not about rushing to buy the dip whereby we tend to touch money that was meant for other purposes without considering the risk involved. People often get excited and carried away when they see the dip and then invest their emergency funds and monthly expenses funds into the market. Instead of doing this, its better we remove this expenses an invest whats left into the dip because if life event happens and there is no fund to use we may end up tapping into our investment.

Definitely, overly lump summing without proper financial planning has lots of consequences on the investor both emotionally and financially like being left with little funds to attend to basic needs and emergencies because when the lump summing is overly done, then it is evident that a lot of emergency funds must have gone into the investment and these might be emotionally stressful, especially when the markets move sharply below the purchase price creating a state of restlessness for the investor since he did not invest only with discretionary income and most times the investor might not be able to contain the pressure leading to panic selling and immediate loss in investments.

Other times the shock from overinvesting in bitcoin at a point can shorten the longevity of your investment journey as an investor since recovery time would be taken off to gain your balance and there is no guarantee the investor would return to regular investment pattern anytime soon. Also, the less informed investor may be gathering funds to lumpsum again and miss out purchasing at periodic good prices that DCA presents and possibly may not even be able to gather the mighty funds as expected, therefore ending his investment journey as soon as he started.

Investing as much as you can contain and following up with DCA helps you cultivate a disciplined approach to investing and be able to buy periodically and accumulate good stashes of bitcoin in no distant time as long as you have started, you are consistent with it and have set an investment target, you would achieve it with time while your periodic investments places less financial, emotional  and physical burden on you.

The fact that Dip always create opportunity for investor to accumulate more Bitcoin doesn't mean one should invest more than they are suppose to invest. Some people who  panic and tamper their investment sometimes is as a result of what I mentioned above however, my advise is anyone who wants to take advantage of the Dip should check his/her pucket  very well in other words, plan before doing anything so that you don't come here and say things that will mislead or discourage people because of what you get yourself into after all Dip is what is band to happen in Bitcoin one can invest anytime just that the more Bitcoin increase the higher the Dip that is to say that any new ATH has it Dip limit  though it volatility can be very funny at times.

I think investors who are accumulating bitcoin for long-term profit should not try and figure out the best time to accumulate bitcoin because it will delay their bitcoin accumulation journey, and that's indirectly timing the bitcoin market. Their major concern should be how to be consistent in accumulating bitcoin, increasing the size of their bitcoin holdings, and being able to solve their daily needs.
The actual time to accumulate bitcoin is when your bitcoin accumulation money is ready and you use it right away to invest in bitcoin without having any point of entry on your mind.
What if you feel like investing in bitcoin twice per year? Your approach to accumulating bitcoin will make you less consistent, and you can't accumulate a reasonable amount of bitcoin. It will be better if you adopt the DCA strategy to accumulate bitcoin either weekly or monthly to help you be consistent and serious about accumulating bitcoin.
I disagree with you; bitcoin investment is a long-term investment, and if you fail to plan, I doubt you will sell your bitcoin during your accumulation process. No matter how shitty your source of income is, always make provisions for emergency funds, reserve funds, and floats if you want to succeed with bitcoin investment.

I so much appreciate this because, often times lots of folks make this mistake of over lump summing bitcoin at the top and when there is a sudden bearish market which last longer than expected, they tends to be scared to follow up with investing further to take advantage of the dip. What I have learned from this is that when an investor wants to lump sum bitcoin at the top, he shouldn't go all in at once. He should invest with caution and divide the money and use part of it to lump sum and keep the rest as a reserve which he will use as a follow up should there be a dip that tends to last longer than expected, especially those dip that last for years. Another thing I have learnt from this is that, it's not enough to lump sum once and neglect to keep investing further when the dip happens, while you are waiting for the bullish market to return.

Basically the investor's expectation of buying dips is unlimited and they will continue to look for it until it is zero so in my opinion an investor should continue to deposit the DCA method regardless of the market price. Yes, if we see a bearish while we keep this trend going, the lump sum investment could be truly unprecedented considering the situation which could increase the Bitcoin stash and accumulate more holdings than expected before completing a cycle. While both affordability and opportunities for buying lump sums can be uncertain for investors, if one can arrange their portfolio according to both processes, they will surely be several steps ahead in investing.

As you say there is no exact formula but I think both DCA and lump sum investment are sure solutions. As a bitcoin investor I prefer to accumulate regularly in any price situation as I know that buying extra during dips can increase my holdings yet try to refrain from being aggressive as I always try to keep my real assets much higher than invested. And following this method is basically taken from this thread. Although every dips motivates me to buy aggressively but I try to buy a bit more than the normal accumulation in those situations so that I can continue holding long term later. As possible.

Thank you JayJuanGee for the correction and always standing as a mentor for us all, actually I never knew that I was misunderstanding the Lump strategy to another so I'm happy that you have corrected me because I have now understand the differences, I wish most people will see this so that they would also understand more better because I realized that most of the investors also have the mindset that lump sum is a strategy for dip and they always wait for the price to drop before buying without knowing that they are getting it wrong, so actually this your clarification has really helped a lot because it has restructured my mindset about it and also make me to understand it more better now.