Topic: DCA method - page 6. (Read 3547 times)

Any sell above the buy price is not a loss and they have actually lost the asset to gain higher profit at the next ATH, unless they take advantage of the opportunity of lower buyback rate gradually prioritizing DCA strategy to anticipate the possibility of market rate decreasing anytime. I do not blame anyone who sells bitcoin assets at a certain price because every investor has a different relative profit target. I only suggest not to keep money in the bank balance without using it for passive income opportunities.

Wise investors see the opportunity of higher profit in the future and they do not do any activity on the crypto asset portfolio, let the crypto assets work on their own to achieve unlimited profit and they have accumulated very high profits in the portfolio but still consistently hold bitcoin assets until they reach ATH.

and in my opinion, whatever the market conditions are if we are good at reading market direction, there will definitely be an opportunity to get the best price whether it is in buying or if we want to sell it, meaning it may be common knowledge that investing and trading at golden moments in the market so that we produce better trading quality because consciously or not the trading system also teaches us how patience works to produce better investment results in the future and not always fail at the same point.

Running at loss when you sell during the bull run when the price of bitcoin hasn't reached ATH  does not mean that you are at loss because it is the price that you bought bitcoin that will determine if you are selling at loss. For instance someone that bought bitcoin at 17k+ and sells when bitcoin price is at 90k did not run at loss even if bitcoin ATH is 120k.

However, it will be better for one to hodli his bitcoin and continue increasing it overtime because bitcoin price will hit above 200k in future and that is why selling early when you see little profits will lead to regrets in the latter.

The way that the "dip" and "top" are defined change everything.

At any point in time where you have an All Time High value of Bitcoin, it means that all the tops before then when you sold you basically lost money and would have been better off to sell at the ATH.

Of course you don't know when that is, but this suggests that it is actually better to not buy and sell continuously but rather save Bitcoin for a longer time.

Clearly no one knows what is going to happen, but there are always risks involved.

As a generally applicable technique trading would not have had been more profitable than bitcoin as compared with  a DCA strategy, and so the longer that you go out, the more likely that DCA would have had beaten trading.    You are misleading to suggest trading as being more profitable as a general principle, even though there are likely examples that can be found where traders had in fact beaten a DCA technique, especially if you go back historically and look at BTC's price performance retroactively, yet if you try to apply a trading technique as a general principle, more likely you are not going to beat DCA because it is quite likely that you would have sold too much too soon or engaged in other techniques that end up causing you to not retain as many coins as would have had happened in a DCA technique.

Remember strict DCA has nothing to do with selling and/or trading.

We can take your own forum registration date as an example, which likely a strict DCA strategy would have had gotten you right around 44x profits.  Have you beaten that with trading?


I wrote about this recently in another one of my posts.



O.k.  Sure if you are trading, you might not need to identify the exact top nor the exact bottom.  You can just get someone in the ballpark of identifying a large enough price rise to know to sell, and then you also have to figure out when to buy back without screwing it up too much, especially since you are likely going to be nervous to have had sold your bitcoin while you are still in your accumulation phases.

I know that you can look back on a historical chart and you can see when you should have had sold and when you should have had bought, but how the hell is a normie going to figure that out without stressing himself out. .and to me it seeems way better for a normie just to be buying ongongly, regularly, persistently and consistently for at least for a whole cycle, maybe even two cycles, before even trying to fuck around with trading, and even if he tries to trade, it is probably not good to be doing such a thing with large portions of his BTC holdings.. but hey whatever, you can spout out all that you like about trading being better than DCA, accumulating and/or holding, but I really doubt that you have any kind of a great system that would be practical for someone who really has a goal to accumulate as many bitcoin as he can without overly putting his accumulation at risk, and it seems one of the greatest ways to put your BTC holdings at risk is to sell too muc too soon, especially when we are dealing with what seems to be amoungst the best, if not the best, long term investment currently available to normies... so why be fucking around trying to trade such an asset that is already good on its own, merely because you are wanting to get greedy and/or to rush your getting rich process.

By trading, have you personally (pawel7777) been able to beat a DCA strategy in your nearly 11 years in bitcoin (going from your forum registration date)?


How are you going to know if a consolidation period is happening?  especially as a newbie?

I bet it is much better to focus on DCAing and accumulating bitcoin for a while before fucking around with the various attempts to time the market that you are suggesting.

I certainly have no problem with trying to time dips or to supplement DCA strategies with lump sum and/or buying dips, yet I find it quite problematic, or even worse to believe that selling BTC, especially for newbies would be a good and/or solid practice for anyone considering themselves to be either in their early BTC accumulation stages or to be still in need to sufficiently/adequately prepare for up.  Surely there can be situations where guys have concluded that they are already sufficiently/adequately prepared for up, so then they might be in a bit of a luxury position to wait for a further dip before buying more BTC, yet surely some of those guys are gong to end up waiting for dips that don't end up happening.. so waiting can sometimes screw up and/or interfere with an otherwise good and solid and even aggressive ongoing accumulation strategy that might mostly focus on DCAing.

Of course there are other ways.
"Buying the dip" and selling at the peak is one of the most popular strategy and one that tends to be more profitable that DCA.
You don't have to time the market perfectly, you're not doing day-trading here, all is required is to correctly identify where in the long-term trend we are. i.e. if we are down 70-80% from the ATH, then it's fair to say we're around the bottom and it would make sense to but more then instead of when the price brakes the new ATH and all the metrics show the market is overheated.
Or you could add some DCA elements to it, e.g. set regular purchases in the "consolidation period" only etc.

There is no other method, actually. Unless you're a successful macro-investor with high win-rate, there is no other more empirically successful method for buying Bitcoin. Acknowledge that you can't time the market, and try to buy on the most average price for the last few months, which can only be approximated by DCA-ing.

You are right, when someone wants to run the DCA method consistently, they must be very good at financial management and they must also set aside funds for their emergency needs so that they do not have financial problems when running an investment that makes them have to take the funds they have invested.
I think everyone has understood well that the DCA method is a long-term investment that requires them to continue to accumulate their Bitcoin assets until they reach the target they have made, because if they cannot maintain their assets in the long term, then it is likely that they will not get the benefits of what they have invested.
What you have said is very appropriate, it will be very profitable for those who can run the DCA method consistently, they will make a profit from it, but for those who cannot survive, it would be better for them to be able to manage the income they have earned well so that they have the opportunity to run the method well.

A person who does not have disposable income should not be investing in bitcoin, since that would arise to the level of gambling rather than investing, since you need to have money that is extra beyond your expenses and beyond what you are going to need for the next 4-10 years or longer. 

I understand that there are many poor people who are barely able to make ends meet and barely able to pay their expenses, and so if their income did not go up, yet their prices doubled, then they do not have money to be putting into bitcoin.

There is nothing that these guys can really do except to figure out ways to either increase their income and/or to decrease their expenses.  If they are not able to create a situation in which they have disposable income, including that they are able to invest at least a whole cycle.. yet even preferably 4-10 years or even longer, then I would not even recommend investing into bitcoin. .since that would be gambling rather than investing.. and I don't recommend that people gamble, especially with money that they need.

I think that many times members discuss ways that other members might be able to increase their income by increasing their skils, education and/or experiences, so that they can obtain higher paying job, yet at the same time, it is understandable that there are some places in the world in which wages are really depressed and there are not a lot of jobs available that pay money that goes beyond subsistence levels.. which on its own, that would not be enough to be able to invest into bitcoin.


DCA only works if you are taking such money from your disposable income, and if you do not have disposable income then you should not be investing into bitcoin, even with DCA and even with ONLY $10 per week.  If you cannot afford to set aside $10 per week or even $10 per month, and to keep that money set aside for 4-10 years or longer then to me it seems that you would be gambling or trading rather than investing, and it seems better to have a long term commitment to BTC, so you miight not have enough income or low enough expenses in order to create disposable income for yourself.  So you may well not be in a position to be buying bitcoin.


If you are new to bitcoin, and you are using funds that are from your disposable income that you are not going to need for 4-10 years or longer, then there should be no need to get all worked up about whether the BTC price is going up or down or sideways, and surely there are advantages to those who are able to continue to invest into bitcoin, and surely not everyone is able to front-load their investment.  Usually people who are able to front load their investment would be reallocating from some other investment that they have.. or maybe they had come across a lot of money by selling a business or a house or inheritance or some other reason that they are able to buy in a lump sum way that is front loading their investment.


I doubt that you are helping yourself out when you are getting overly concerned about potential short term changes in the BTC prices, and it seems to me that long term investors should not be getting too worked up about short term BTC price changes, and surely they are still investing into bitcoin with an expectation that their investment into bitcoin will put them in a better position than if they had not invested into bitcoin, yet at the same time, there are no guarantees that they are going to do better because they invested into bitcoin since past bitcoin performance does not guarantee future good performance.

Folks who get overly worked up about short  term BTC price moves might be trying to buy on the dip and then sell when the BTC price goes up, and surely I do not recommend trading, and especially trading likely puts people into a gambling mindset rather than an investing mindset, so you likely should be able to invest whatever you are able to do on a  weekly basis and then hopefully after 3-10 years or longer, you will be in a better place and with more options than you would have had if you had chosen not to invest into bitcoin.  And yeah, there are no guarantees, since bitcoin could end up going to zero, yet you figure out the size of the investment that you would like to make, whether it is $100 per week, $10 per week or some other amount that seems to be reasonable for your situation and your perception of how to go forward with your bitcoin investment strategies... and frequently, I suggest that guys need to spend time accumulating bitcoin first before they are in a position to potentially consider other strategies, such as merely just going into a maintenance stage in which they might have concluded that they have accumulated enough, yet if someone is investing bare minimum amounts, it could take 15-20 years or longer to really get into a place where he might be able to transition away from accumulating BTC and potentially into a maintenance stage.
 

If you are fairly new to bitcoin and if you are planning to invest into bitcoin, then why should you give too many shits about whether BTC reaches $100k or not? unless you are planning to try to trade it, and I really doubt that DCA is a great strategy for trading, but yeah, you can do whatever you like.  If you want to spend some time accumulating BTC in order that you can sell it for 30% to 80% profits, then that is your choice, and you are likely going to have fun staying poor (as the saying goes), since bitcoin seems better as a long term investment and a long term time frame for investing into it rather than fucking around with getting in and then getting out for likely small profits, especially if you barely spend any time (or you barely have any money) investing in it.  But whatever, you are free to do what you like, even dumb things. It is your choice how to treat your bitcoin investment  (and/or trade). 

The reason why most people delay their investment could be as a reason of lack of funds and lack of trust since they aren't having any external fund that is serving as a reserve or cushion fund to serves for their needs and when a little percentage gets to their hands they would feel like to investment but haven considered their next income, it wouldn't served for the duration of the month couples with the inflation ravaging the whole nation where an average salary earner would have to reason twice of their income to be able to carve out some percentage to invest into bitcoin.

Yes we know DCA is the best method for starting as very little as anyone can, but then when there is no enough fund to foot their upcoming bills or a funds to serve for them when the need might arise could be another factor to be consider. Thus, though who had already made investment in bulk and front loaded their portfolio necessarily have to be in pressure for investment and can either join gradual accumulation while the market is either being in a dip phase where one needs to carefully monitor the market before starting the accumulation process.

And that is true, the disadvantage of not accumulating when bitcoin price dip could result in either regret or having no option to wait while the price makes a reverse where they would need start when the price dip again, but they had already missed their previous chances where they could had use the first chances to double their portfolio but yet without knowing that any chance missed today in bitcoin investment can never be recovered anymore since bitcoin doesn't go back to the previous price just as those who missed the earlier stage of 2013-2020 can never have that value back again because we keep growing the more bitcoin price keeps rising from the previous to above what we don't even imagine could be the worth.

Just as many has been speculating that bitcoin could hit the price of 100k at the end of this years, though I can't say this not possible but sometimes there is need to be questioned because this year already running to end how and where could this likely happened and of course there is every possibility but when checked the historical data there isn't point that this end of the year would see bitcoin hitting the price of 100k but hopefully would happened by next as we may have it.

These responses to Kara3 are a bit confusing, since Kara3 is correct that DCA is amongst the better of ways for poor people to get into bitcoin investing within their budget, and surely lump sum investing and buying on dip also exist, and even though lump sum might be better than DCA, several poor people might not have lump sum funds available.  It is similarly true with rich folks, they might not have lump sum funds available, but  if they do have lump sum funds available then they have more options to divide such lump sum into 1) buy right away, 2) buy on the dip and/or 3) DCA, and surely it is up to them what to do, if they determine that buying right away is not a preferable approach then buy on the dip and/or DCA allows for deferring purchasing based  on time and/or based on price.  DCA that is executed based on income coming  in and coming available  is not necessarily deferring purchasing since the DCA could be executed as soon as the money comes available. 

Each of the BTC accumulation methods have advantages and disadvantages, and frequently folks who are low coiners or no coiners, they may need to take quite a bit of time to build up their BTC investment portfolio, yet there usually is no reason to purposefully delay making their purchases unless they are delaying based on budgetting considerations and considerations that the BTC price might dip, so they hold back some of their funds.. yet it still may well be preferable for any newbie investor, whether rich or poor to invest regularly, such as weekly as their income comes in, which is a form of DCA.. .and it allows them to pretty much invest into BTC as the money comes available, which they might not even want to do that if they had already invested heavily earlier on, such as front-loading their BTC investment.  Some one who front loads his BTC investment might not feel as much need to DCA invest into bitcoin..

Exactly right.

At the end of the day you want to minimize the price of the asset, Bitcoin, when you buy it. Because you don't know the future price, you can only guess. DCA and lump sum are simply different ways to invest the same amount of money.

In lump sum you are basically betting that right now (or when the lump sum is done) it is the lowest point.

With DCA you simply even out the risk of getting that date right. This means that your price will be closer to the average, that means you won't win as much but also not lose as much compared to lump sum.

After the fact you can calculate which was the best strategy, but you can't do that beforehand as you can't predict the future price of Bitcoin.

That's nonsense. DCA is an investment strategy that solves the need for investors to know when to enter the market. It has nothing to do with being a high or low-income earner.
Anyone with a low income could still afford to buy a small fraction of Bitcoin (that they can afford) without the need for cost averaging.
If you're going around telling people that the DCA method is the only way they could invest in Bitcoin - stop. You're not telling them the truth.
And no, DCA is not a magical fail-proof strategy that guarantees profits, nor is it the most profitable one. It's just convenient and easy to grasp, that's all.

And therefore, someone who wants to commit to doing DCA needs to manage their finances more measurably and has prepared carefully the funds that can be set aside for consistent investment. Because in DCA, you cannot invest today and then sell it a month or several months in the future, the investment you make must be in accordance with the target you have previously set, so until the target is achieved what you need to do is keep holding and investing regularly. The key to DCA is consistency, and people who are consistent in this will be able to reap the profits as they expect.

Yeah, also there are extra things to consider, like the extra fees that people might end up paying when buying small amounts of Bitcoin multiple times.

There might be situations in which buying a larger amount is cheaper in the end.

Also there is the fact that you should withdraw your bitcoin into your own wallet which also comes with mining fees

I agree with you: you usually do DCA on some asset that you want to keep acquiring because you strongly believe it will keep growing in value in the future. Bitcoin back in 2013 was still very risky and pretty much a huge bet, doing DCA on such thing would be very unusual. For sure someone did it but we're really talking about very few people.

I don't really think people had practiced dca during 2013. Even a lot of people didn't have the idea that Bitcoin would continue going up to what it is today. A lot of investors or holders from 2013 sold more of their Bitcoin and had less, only a few were lucky enough to have a good amount of Bitcoin in their wallet till today. However, dca does not require much evaluation and analysis. It is easy to plan, a certain percentage should be removed for dca while the rest go in for upkeep and emergency funds.

The choice to hold our Bitcoin is up to each investor, even as we may discuss whats best for investors in the public thread it isn't a must that all investors should adhere to the idea of holding for long because it depends on our investment logetivity.

But at the end of the day, it's not something that anyone can do because we're focusing on DCA as if it's easy and I want to say that it's not as easy as it seems because even though DCA has always been the most popular choice to date, there are many people who end up failing because the DCA method is too easy for them and so they fail because they have the wrong concept about DCA.

I understand why everyone always thinks about DCA when they invest for the long term as an initial choice but in the end things like this also cannot be underestimated because most of us cannot even manage DCA schemes because we are too focused on future profits so we cannot pay attention to our financial conditions and do DCA that does not match our income and expenses in the life that is run.
What I want to say in this case is that although DCA is a good thing for the bitcoin collection process, in the end we must remain careful and not consider this easy because there will be many considerations that must be considered when we do DCA so that it is not as easy as we imagine.

Yes, there's no harm for both strategies as they're about acquiring more assets, acquiring more Bitcoins. As long as you've got, you're free to do what's necessary when the market is down.

It's not that difficult to achieve, you don't have to time the market and you only need to satisfy yourself as long as it's under your radar or within the price range that you're about to buy. Getting the maximum returns will take you longer and that could even you lose your profits in the long run. So, you only have to remember that whenever you're in profit, that's a profit in there whether it is maximum or not.

DCA method should be done in such a way that only money has to be invested in Bitcoin, and this investment has to be for a long time. There is no thought of selling bitcoins from this investment. But usually this Bitcoin DCA method will follow the basic needs of the family and with the extra money, because the more the investment, the more profitable it is because in the future the price of Bitcoin will surely increase several times more than the current price. Note that those who have done the DCA method since 2013, and have played holdings have accumulated and held the highest Bitcoins ever. So if you want to hold Bitcoin then you must hold Bitcoin for a long time and keep investing regularly.