Topic: DCA method - page 11. (Read 3726 times)

You surely seem to be describing matters from a trading rather than an investing perspective, and sure I understand that some traders might even use DCA to establish their position and so if they do not have a lump sum they use DCA to establish their position over time, and so traders consider their entry and exit plans with quite a bit more specificity than investors, and investors may well take a while to get into a position or even might DCA for 15 to 20 years or more before finally coming to a time where there might become justified some kind of a need to reassess whether he might have already accumulated enough or if some other variation of the strategy such as buying on dips or some changes in the DCA timeline or amounts....

So the longer term investor might hardly have any clues regarding exact exit plans and/or conditions, except maybe just generally expecting that over the longer term the asset (in this case bitcoin) is likely to continue to go up in value..and then reassessments could be made along the way... Another thing an investor may or may not consider downside conditions upon which to exit the investment, and he may well be willing to ride  the investment to zero or somewhere close to zero or may have some other thoughts about what might trigger the need to exit the investment, even if the investment were to end up at a loss, but the specifics might not be exactly established at the start and those kinds of conditions might be reassessed along the way, even though some general expectations of profits would be the base case, there is also simultaneous abilities to appreciate that scenarios outside of the base case could end up playing out.

An investor will only choose to take profit on a distinguished occasion. One would be based on the investment logetivivty. If the investment is for the short term then it is likely that he will take it at every moment in time that he accrue a profit. If it's for the long term then there must be a target or horizon that he has in mind for withdrawal. Another fact that may cause an investor to profit at favorable conditions is life happenings. Ranging from unexpected expenses, debts, health care and to mention a few.

Every entry point is a good time to buy. At 1$, 10$, 1000$, 10,000 or 100,000$. One thing is certain the price will continue to increase as years pass by.

If you understand what investment in Bitcoin is all about you won't be talking about failing to take profit during favorable market condition and on the other hand you sound like a trader, because accumulating and taking profit in short interval because of bullish market is same thing as trading. As far as Bitcoin investment is concerned I doubt if there's anything like best buying price  and somehow I think the DCA method was brought because there's no best buying price, so as to enable one invest regardless of the price and hold for a period of time and the reason one should hold for a period is that since they are not buying at a particular price I mean since it is a continuous buying process sometimes you can't be sure if you have made profit because of buying at different price and this makes me feel DCA is mostly for future use. The funny thing about DCAING is that while some investors are waiting for the Dip to invest one is busy accumulating with the DCA and I will say that is an advantage and one  of the amazing thing about DCA method.

Sure DCA is easy and sounds a good a way to acquire bitcoin gradually to have it ready during the bull run. However, not being able to execute it correctly may decrease your chances of maximizing your profit. They can't just continue buying regardless if they are DCAing when the price is high, they need to find a good entry point from where they can have another purchase especially for small time investors or low income earners, this is very important to maximize the profit.

That's what I mentioned earlier when I said the profit will be based on the capital spent so if the investment we make is large then surely the profit is also greater but the point in this case is that regardless of the size or small investment we make it will get its own portion of profit.
Talking about investment and happiness in profit, of course, this does affect but when we talk about investment, the goal is long-term, let alone doing DCA consistently.
For example when we invest $20 every month then indirectly in 1 year it means there is already $240 for us to invest in consistent DCA and it will increase as long as you do DCA for example in a period of several years. so in this case it is not about the problem of big or small but our confidence whether we can do a good DCA or not. of course we can also compensate for this with something else like buying on the dip when the market is crashing to increase our portopolio.

In addition, of course we will also not stick to the initial value of $20 before because we can do better if we have more money because even though our expenses are many and our countries have different economic levels but I personally do DCA $10 per week it is still doable and until now I am still doing it and I am still comfortable with $40 per week even though it is not big but I believe that when my consistency in doing DCA then it can be something useful and get more benefits in the next few years.

What you said @OP is right because by using the DCA method, they can buy more bitcoin with the same amount of fiat if the bitcoin price goes down.
But when the price of bitcoin rises, they have to increase the amount of fiat to get the same amount of bitcoin as before.
I prefer to use the same amount of fiat every time I buy bitcoin, regardless of whether the price is below or above.
I don't care about price changes because I focus on staying invested every week or month.
This has made things easier for me because I can manage my finances and not interfere with my financial allocation for other things.

You're right that little, steady investments are better than nothing, but isnt that too simplistic? Shouldnt investment size affect profits and happiness, especially in Bitcoin's volatile corridors? Yes, tiny gains are better than no gains, but theres a plateau where the returns may not justify the patience and strategy over time, right?

DCA is acclaimed for minimising risks and avoiding bad timing, but doesnt its efficacy decrease with small investment amounts? In a market slump, minor profits may not have the desired effect. So, while consistent, little investments have their benefits, is there a way to boost returns?

I also introduced dca to my friends and they was not excited. Because it's only profitable if you assume that asset will growth in the future

Most of technical analyses are right before they become inaccurate. If right or wrong is not related to your money, it's okay but if it is related to your money, profit and loss especially loss, it's no longer just a funny story. When loss comes, it is not fine.

Bitcoin Spot ETF approval will be very hot and when that news comes, if a trader has an open short position, it will be liquidated by exchanges because market will massively blast off after the news comes out. Strong resistance will be no longer strong and technical analysis that says the strong resistance will not be broken out, will become wrong. If you believe it, make a short position, let it opens, you will lose money to forced liquidation.

DCA is a viable option for people who have low monthly wages. People who earn little do not have much capital to invest, and by the time they save money to buy Bitcoin, the price will already be out of their reach, so DCA provides them with a way to accumulate a small amount of BTC by allocating a portion of money from their savings. This investment will not burden him or his family, and he will secure his future to an extent.
It is also equally beneficial for people who have a good amount of savings as this will give them a chance to buy Bitcoin even when the price is dipping, and their average purchase price will be much lower than those who purchased BTC as a single large trade.
It is not a wise option during a bull run.

Everyone can invest in btc and DCA is obviously the best way to aquire some part of BTC at every salary. Just like your friends, some of my friends thinking that btc will only profit when they buy whole btc which is not right thinking. we can increase our Satoshis by DCA method and day will come that we will be owner of whole btc.

Most of the people couldn't afford to invest big in the start especially students, small job persons. If your friends follow your advice, I hope they will thanks you in the future. Yiu should also aware them risk, emotion control and market change history also so that they doesn't misguided from the start.

I don't doubt the significance of investing, through DCA or not, even in small amounts. Not everyone is comfortable investing higher amounts of money or can afford to do that. Personally, I don't. However, we need to set realistic expectations, not only for minor investments but in general. There are some users that are advising newbies to start even as small as $20 to $30 per month, which I'm not against, of course, but at the same time are laying completely unrealistic expectations due to the upcoming halving. $30 per month is $360 per year, which for the majority of us is a petty amount, and it's certainly not enough to make you well-off, despite what happens after the halving cycle is complete.

As I mentioned earlier, I'm not against investing small amounts of money; it's still better than not investing at all, while it also teaches the basic principles of saving and putting aside money for the future. However, this results in making Bitcoin look like a get-rich-quick scheme, which it is not. The media is also assisting in that due to a number of success stories from the early days or by altcoins such as Doge (the Elon Musk incident a few years ago).

Yes DCA is an older method than bitcoin. DCA can also be used for any purchases whose prices fluctuate, such as on the stock market. Even though DCA is a widely used method, this method also has weaknesses. When we buy bitcoin and it turns out the price goes up the next week, we can't buy again at the lowest price. Moreover, if the price of bitcoin continues to rise continuously then we will buy bitcoin at a price range that is getting more expensive every day.

Of course that is correct, because otherwise no one would have used that method and no one would have given advice to do DCA. But since many people are saying here on the forum platform that it is good to apply that to saving any cryptocurrencies, I can probably see that many people will harvest a good harvest in the upcoming bull run next year.

As for me, I haven't saved that much yet, as long as the important thing is that I also have a harvest because of what I accumulate that I believe can give me savings in the future, and it's a big deal that even if it's 100k$ each of Bitcoin and even other crypto currencies that can also kick in value in the future.

The points you said are good in this case but I definitely disagree with what you said, indeed when talking about the quality of purchase about $20 will feel small but when the strategy in terms of quantity and effectiveness it is better. Indeed, we know that when we are in bitcoin with a small amount, it will definitely make a small profit too but the point is not there because in this case we must be aware that whatever amount we get in the end will be much better than nothing so that regardless of the amount that exists and we invest in the end as long as we have a level of consistency in making investments it will definitely be paid according to what we sowed before.
The DCA method is a good method if indeed we want to become an investor, especially in bitcoin with a long term especially if we are serious about doing it.

The way the DCA method is being preached and hyped in bitcoin will make a layman think if there's another thing special I'm DCA. The matter of fact is that DCA is a natural method of acquiring wealth. This means that many people must have been using the method without knowing that they are using the DCA method.
When you receive salary weekly and monthly and you use a budgeted part of the salary to buy bitcoin, is it not DCA method? Just like buy as you earn. Buy small small according to your financial strength. It is a natural method and not something to be learnt or forced on people.
I also believe that the Idea of DCA has been in existence even before bitcoin and cryptocurrency is invented.

In my opinion, DCA (Dollar Cost Average) is not obligatory for low-income earners or investors. This is a general idea for everyone, meaning anyone who wants to invest in Bitcoin, Altcoin, etc. should diversify their fund under DCA to reduce risk management and short-term losses. There is nothing wrong with it; everyone can benefit from it.

You are absolutely right that, looking at the current Bitcoin price, diversifying your portfolio under DCS is the best strategy that reduces your risk of short-term loss. And anyway, there is a possibility of a bull run after the halving, so it would be better to DCA your portfolio and hold your assets until BTC crosses its ATH. Which can give you a huge profit.

That's definitely a lack of knowledge, a lot of people enter the market without knowing anything at all or doing any research from their end, they basically expect that they will learn everything once they get into the market but that's a wrong mindset because once you get involved monetarily, you might learn but you will learn things the hard way, so it's obviously better if they learn at least the basics before they enter the market and make their first Bitcoin purchase.

A lot of people don't buy because they don't know about the DCA method, the market goes down and becomes stable at one point, and they keep waiting because they think the market might fall even more and they will buy once that happens whereas they can start buying at that point using the DCA method.

- I agree that Dollar-Cost Averaging (DCA) is a good method for gradually accumulating assets over time, especially if you don't have the time to constantly analyze the best buying prices. However, I'd like to emphasize the importance of deciding when to stop DCA and begin selling. If you have a strategy for buying through DCA, it's equally important to have a plan for selling, especially during bullish market phases. Failing to take profits during favorable market conditions can lead to prolonged and painful bear market periods.
- There's a classic saying in investing: "If you don't take profits, someone else will take profits for you." This highlights the significance of having a clear exit strategy to lock in gains.

It's a nice idea to consider the thought of DCA, still, it is most effective for long term holding or HODLING as is known here. The compound effect will result in a slight profit on the investment that was DCAd all the while.

If you got patience to continue even after a pause due to pressing issues, then you have been prudent enough as a good holder.