Topic: DCA vs Smart DCA, what do you choose? (Read 579 times)

Each person has unique conditions to plan their investment and your case is a good example. We are all different and even with DCA, people can apply it differently. Depends on capital they have, income they have and available time they have for investment.

Even if I am younger, but assume I know that I need to use my money next two or three years, I will try to find best chances to take profit in this cycle because I know that if I hesitate to take profit, I will stuck in a next bear market and I will have to sell my bitcoins at lower price than in this bull run.

Gradually exit in a bull run, if don't plan to invest and hold a long time, is good strategy.

Below are some strategies for newbies, not you as I know you are experienced enough in this market.

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At 67 my dca time frames are shorter.

I purchased from nov 2022 to 2023 nov maybe dec 2023.

I sold some kept most.  a five year dca with a five year hodl is not realistic at my age.  as i want some life to live now since I am 67. I have no one to give when I die. So spending is part of what I do.

Dollar-Cost Averaging: Pros and Cons
https://dcabtc.com/
https://costavg.com/

I will be happy to learn about the DCA method if anyone will be so kind to share me any link that can help. The link in the first post talks about Smart DCA which is also clear in the chart. I would have loved to also learn about DCA to be able to compare as I start my bitcoin investment. I have read through many comments but I have not seen anyone that explained the DCA aspect.

I must say that I like the way you balance things here as you speak for the possible cons and pros in your opinion and still arrive at your conclusion which also agrees with mine. You see, these days, a lot of people are just coming up with their ideas and are labelling them what they like. But one thing that is sure is that it is better we keep it simple and not complicate things for ourselves even as the term Smart DCA is confusing due to different meanings of people to it. The subject of smart DCA is still new and it is mainly about how we divest and not invest by some people where they divest some parts on market depreciation to purchase it back. A way we reduce our risk in the bearish mode, which is not a traditional way of investment through the DCA approach. This is also different with some people as they believe it is a simple way to invest only in a smart way.

You know what? To avoid issues, I stick with my standard DCA approach. The main reason why I like the DCA approach is that you average your potential gains and risks, and as far as I am concerned, it is only greed that can make people do otherwise because they want more. It's greed in the sense that you want to outsmart the market more, but in the process, you can cheat yourself or even get confused. So, why not stick to the DCA way that has been tested for centuries to be working fine if used correctly? Many of the recent additions/modifications will only put more investors in trouble if care is not taken. The market is dynamic and tricky, so what you think works now may not work later. However, by using the DCA strictly, you have effectively averaged the risks and the potential benefits. Also, by shunning the greed and side attractions like the smart DCA makes you a focused and disciplined investor in my opinion.

what you both may not realise is in tradfi. people dont just deposit their pre-tax income into a stock/asset at whatever the price is at deposit time
instead they deposit their income into a portfolio.. that is managed by a portfolio manager, and that manager chooses the asset and time to invest in
whereby the manager does #buy-low-sell-high practices

so in tradfi DCA is not just buy an asset at whatever price it is at deposit time

however in crypto we dont beleive in using portfolio managers so we need to become our own portfolio managers, which means actually getting smarter and choosing to invest at slightly better options/times compared to just random buys at deposit receipt

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the only reason social media are presenting DCA in crypto as "always be buying even on the high" is because those wanting to sell high to grab FIAT profit. always want there to be naive buyers still buying at the high

I see it depends on the goals and financial strength of DCA itself.
whether beginners or old, traditional DCA is used more to accumulate bitcoins in a portfolio on a regular basis, not for the purpose of earning more profits. So it is very appropriate to use traditional DCA because you don't need to be confused about market conditions, see potential declines, read good and bad news that can affect the price of bitcoin, and so on. we just need to buy bitcoin regularly every week or month.

In my opinion, Smart DCA is the opposite, or more precisely, it is more about accumulating bitcoin using trading techniques. You will definitely read more and see market conditions. by using this method you should also be able to allocate more funds. because a decline can occur at any time. It could also be that when the price is falling and we believe now is the right time to buy, tomorrow or the day after tomorrow the price will fall again. of course it will make us buy some more bitcoins.

Yes. A real effort you have made and it is quite time-consuming of course, but we have all lived our respective roles. I don't know what we are struggling with, but our goal here is certainly the same. That is to the point of finally making a lot of money as you wrote.

well he only went back to 2022.


I did two moves other than mining from 2022 oct.

I did 1 year dca weekly and I did buy the dip or smart buys


so 52x dca and four dip buys about 5 or 6 x each or 24x buy the dip.


the buy the dip were all under 20k.

the 52 weeks of dca average was about 26k

both made solid money.

But they were for a years time

It is still DCA. It is similar to your practice with any technical indicator for your trading, you can customize many parameters in a same indicator and still can not change that indicator to a new one.

DCA is still flexible and your example is true. Sometimes with some people, they can not have available money for investment regularly on exactly weekly or monthly basis and they don't even have to double their input money if they skip a last month (don't have money for DCA last month). They can change from weekly to monthly then back to weekly, depends on their financial status and available money for investment.

I agree that timing the market is not actually good but if you know what you are doing, you can do it and it is still DCA but it is applicable for more experienced and skillful investors.

For newbies, yes, Traditional DCA is best.

There are various indicators like this but it's hard to find trustworthty

When it comes to DCA then i dont really mind much about being smart or not because each one of us would really be having that kind of decisions and financial capabilities on which there are ones who could really be able to have DCA in weekly basis or monthly basis which it would be depending on the availability of the funds you do have since not all would really be that rich or that having the money whenever the market would be dropping. This is why it would really be best that you should really know on what you are doing when it comes to DCA which is of course we would really be pertaining about low prices or when market dumps.

Dont know about those smart DCA and ordinary DCA on which in overall idea it is really just that the same in overall idea or on how its been done. There are really just those people who
are really not having that kind of capacity on doing so or on how deep is their pockets on the time that the market corrects. We do know that when it comes to buying opportunity
then it would really be something that could be fixed out.

If you modify DCA strategy, it is not DCA anymore. It might be better or worse than DCA’ing but it ain’t no DCA’ing. DCA means buying daily weekly or monthly with the same amount. Of course most people can’t do it properly and it is because sometimes they buy $1000 worth of btc and sometimes a bit more or less. However that’s still considered DCA ing as long as they keep buying. When you try to time your buys, then you are only trying to time the markets. When try to time the markets, the price is the time. If you are that smart, sure go time the markets. DCA is for the people who don’t know how to do it.

Traditional (classic) DCA is better for most of us. We don't have to be FOMO, panic, fearful in the market with price changes either up or down.

This is main use case of Traditional (Classic) DCA but with Smart DCA, we will more likely to be FOMO if waiting too long to get a signal from Smart DCA indicator.

There is nothing perfect for everyone as DCA can be better for me but not better for you and oppositely. Indicator like Smart DCA is only one of factor in investment and if we can not control other things, ourselves, Smart DCA strategy can not help.

Weekly or monthly, it would be nice to implement that in DCA, and I agree with that because that's what I've been doing so far. Now, when every month comes, I'm accumulating $100  in cryptocurrency that I'm saving.

I've been doing it for about 9 months since I started it last year, so what I'm doing seems normal to me, so it's also good to make it a habit because, uptrend or downtrend, we can do it honestly speaking.

For non-traders the traditional DCA is better. For veteran traders who can feel the market (a majority of the time) it may be better to DCA alternatively. I for example think DCAing at established support levels is an improvement over regular DCA that does not take dips into consideration. But that only goes for really good traders who watch the market all the time. A dip can reverse for no reason and they need to act fast during such reversals in order not to lose any potential Bitcoin.

Traditional DCA is way less of a headache and you don't need to have your eyes on the market all the time.

I am currently sticking to the traditional DCA since for me it is the most safe and no stress strategy to acquire Bitcoins. The only problem here is the capital for me since I have no stable job right now aside from my signature campaign rewards which also serves as a weekly DCA. So far I am doing great with this strategy and I think I am sticking on this onwards.

You know what they key thing about DCA is? It can be used by anyone, anytime. No time wasting, no thinking, no analysis. That's why it's perfect for people like me.

Smart DCA just sounds like a version of trading analysis, if you get it wrong you won't lose money but you'll lose time and experience the same frustrations of traders making wrong calls.

Hm... I think I'd choose a mix, actually. During the regular or bear market time, I think regular DCA is totally fine. It's simple, it saves time and nerves because you don't actually have to worry when you're buying your coins, and it allows to effectively accumulate BTC. But perhaps during the rapid bull market, this Smart DCA can be more helpful. Maybe it's not worth it, but it kind of makes sense. When I say 'rapid bull market', I'm trying to make a distinction between, say, all of 2023 and February-March of 2024. In 2023, the price was growing consistently but gradually, and I think regular DCA is okay for such times. But in times of fast growth, like in 2024, perhaps smart DCA is worth looking at.

I don't care which one is best, DCA is DCA to me.

I only DCA when it's convenient for me, it's not a do-or-die  thing that I have to get over with, I am human and I need to cherish every moment too, sometimes I DCA every week and sometimes once a month, it depends on the situation at present, I have responsibilities e.g bills and other.

Buy when there is a dip in the market and wait for your next payout, even if I get my next payout and the assets I want to buy have skyrocketed I won't be buying for that week, I will wait for a retracement or correction if it doesn't happen then I move on, but in the case of Bitcoin I always DCA at whatever the price is at.

Remember, it is still DCA, do not inconvenient yourself about it, invest money you won't need for many months to come, and if you can't afford to DCA in a month it's also fine, it should be convenient, it's why its called Dollar Cost Averaging.

What I know is that DCA is just DCA, and in terms of smart DCA or whatever, I think it's just part of the strategy, including increasing purchases when the market is down and also having good analytical skills.
Because I think many people do DCA but have a good strategy when the market is declining and I think that is a normal thing.
However, what is certain is that DCA is a good strategy and is suitable for investors who do not have the ability to buy in large quantities or the ability to carry out analysis. However, they can do so according to their ability to buy Bitcoin regularly every month, week, or several weeks on a regular basis and aim for the long term.

I also think that the traditional DCA is better. Buying during price drops may be good but what if one long green candle is followed by another long green candle, and another one, and then another one again? You've already missed a lot.

If buying during corrections is really attractive for you but you don't really want to time and analyze the market all the time, then you can integrate it with your existing DCA strategy. It doesn't have to disrupt your DCA schedule. You can have the traditional DCA, but you will also set aside amounts in case there is a correction that's deep enough for you to make the most of.

Overall, it's still Dollar Cost Averaging (DCA) 

The most important here is we must have the confidence to buy Bitcoins without any regrets because that's how the Dollar Cost Averaging (DCA) works.
And that's also common problem of people who wants to buy Bitcoin, they just keep telling to buy but they can't do it.

I would go with traditional DCA method for accumulating Bitcoin since it's tried and tested. There is no ambiguity in DCA if you follow that strategy for longer period of time. I am not much familiar with smart DCA, in fact this is for the very first time I am reading about smart DCA. The issue with Bitcoin is that it's difficult to detect when it's the start of the dip and when it's bottom. Anyone who going with buy on dip will struggle to find the dip and bottom.     

Lump sump strategy pretty much like go big or go home i.e. high risk,high reward.
Smart DCA is moderate risk, moderate reward.
While DCA is low risk, low reward.

Correct, investment into stable asset won't change your life if you don't have high income sources and willing to hold for many years. This is the reason why some people choose to gamble on shitcoins.

But you know what's even better than this so-called "smart DCA"? A lump sum investment ideally in the bear market, but early in the bull run works too. DCA should only be the tool for those who have no savings and want to save a little bit of money from their montly paycheck. But they shouldn't hope to make big returns, because you need money to make money. Even if you DCA $100 every month and they got up 10 times, it still won't change your life.

I thought that DCA is just DCA, no matter what time of the market you do it, it's just that? Quite surprised to see that this isn't the case but I guess, I know now. What's exactly the difference of normal DCA to a smart DCA though besides the Smart DCA having to do with the price correction? Wouldn't it be an obvious thing to do to adjust your DCA when the price starts to go down or up in prices? I think that we're just messing with a lot of people now with this thing that there's an addition of another kind of DCA, just call it DCA if you ask me, it's not like there's a difference, at the least DCA as we know it is flexible enough unlike with this new one, that seems to rely on predicting the price of bitcoin just to make sure that it works well, it could in theory work well but I don't think that every person has the foresight required to do it really well.

The classic DCA is a fool-proof, newbie-friendly method for the majority of users. The smart DCA has major flaws that can ultimately prevent you from actually performing DCA by constantly postponing your purchase. That doesn't mean that the traditional DCA doesn't have any disadvantages, the most important of which is purchasing at peak prices. Perhaps a combination of both is ideal, but it is certainly not a newbie-friendly option. Your best bet is to  take advantage of dips and invest higher amounts during major price dumps.

That's a good point and kind of shows another flaw in the Smart DCA strategy. In the classic DCA, you can easily allocate a budget that you're comfortable with and make regular purchases, whereas in the Smart DCA, you don't have a clue how often will the dips occur. I guess you could still put the same amount aside (e.g. each week or month) and spend it all when the dip finally happens, but, to me, that sounds awfully risky as you could end up sitting out through cheap price periods.
From all the comments in this thread it seems fairly clear that, for most people, the classic DCA is a better choice.

I hadn't heard of the term smart DCA before; it's a little more complicated than traditional DCA, and I'm not overly confident in how consistent you can be. Buying the dip isn't something that you can do on a weekly or monthly basis. Traditional DCA works just fine when there's consistency. However, it has faults when you're sticking to a plan, such as buying at excessively high prices. I'm more keen on taking advantage of the dips and buying higher amounts of Bitcoin, such as purchasing $200 worth of Bitcoin instead of $50, which is your original plan.

Just another name for trying to time the market which has proved not effective, I guess smart DCA would only work for those that have enough time to stare at the charts all day long waiting for the opportunity to buy to come which would be draining on energy and also has a lot of down sides, the normal DCA is far better cause it doesn't involve any timing the market and you can set your dca plan in a way that anytime they is a dip you increase your allocations or lump sum at such intervals so yeah DCA is a far better strategy.

To start with, it's not even everyone that knows about the normal DCA, so there are many newbies that doesn't know about smart DCA. I got to learn about DCA after I joined the forum, although even before then, I could only buy Bitcoin when I had the money that I was convinced I would not use for some time. But the DCA strategy opened me to a lot of ideas about Bitcoin investment, and that's why I believe that some people are just cool with DCA, and for some reasons, like being emotional because of price drops and increases dynamically, some will just want to invest weekly or monthly in a proportional manner as regards their income flow. When one cannot be patient enough to do smart DCA, it is better to just buy whenever you have the money, and based on the time interval, the person has already agreed to invest. 

The DCA strategy is already a smart accumulation strategy. So I don't see any other abbreviations for Smart DCA. It's pretty simple: buy each dip you find and hold it. So when it pumps, you will have good profits considering your average purchase price. For new investors, the DCA strategy is already a smart strategy. But for panic traders or holders, DCA won't be smart. They might become panicked and sell off their holdings. The smart holder strategy is called the DCA strategy, by the way. 

Well a lot, if not all, of people do this already. It’s quite the simple concept of
“buy low, sell high” that was typical used in stocks back then but is still very much
relevant until now.

The problem with this is that those people that aren’t that rich might not
have enough funds to buy bitcoin when it suddenly corrects itself.
This is why sometimes putting in small
amounts of money regularly is much better than buying a huge amount of
bitcoin all at once during a dip

Smart of what ever you perceived it to be, what I know is that, when it comes to Bitcoin investment it good to have an entry price that is low and also to sell at high price, so DCA have to do with luck and chance's and it not far from what you have said as at the interest that comes with taking advantage of the vitality of Bitcoin and what the chances there presents.


Although this present it own risks, but with all you will still be at advantage holding more Bitcoin and what comes along the line while the price keep recovering from price corrections.

Traditional DCA does not require any serious knowledge, just requires some level of commitment to achieve success. It will be easier for a new investor to easily adopt the traditional DCA because it requires simple knowledge.

Traditional DCA is okay for me, and will also be my recommendation to a new investor.

It doesn't matter what kind of DCA is better for us to use. As long as we've got the money ready to get into the market for buying the dip or anytime that we wish to do, that's the best strategy for us. And no matter what kind of classification it has got for DCAing, the best thing to do in the market is to buy the dip whenever there's an entry point that we should buy it. Anyway, how about anyone who uses either of the two is actually a wise and smart investor? 

You are basically saying that smart DCA is a strategy used when one intends to DCA but instead of doing the DCA journey randomly or on specific days, we use the smart DCA indicator to know the exact day to buy before the price gets higher.
Am sure it is just the fact that one has to firstly consult an indicator of sort before making further DCA commitment so as to buy purposefully at the cheapest price and inturn have more value in return that makes this a smart DCA, else, it's just a DCA strategy with indicator tools.

In theory - yes, but there are few factors that could backfire with Smart DCA strategy, i.e. there's no guarantee there will always be a correction or correction could come late, after the price skyrocketed, and you'd be buying at the higher price than those doing classic DCA. Also, unless you managed to automate your purchase (which I don't think is possible on any platform without having a trading bot), there's a risk you could simply miss the correction and not buy in the right time, i.e. due to holidays, other commitments etc.
But yeah, both strategies have their own risks and only the time will tell which one is more effective.

Isn't the reason why people choose DCA sonthey don't have to follow the market on the regular basis, obsess over the price while trying to time the market? So I don't see why someone who goes for that option would switch to "smart DCA" as it goes against the most important reasons why they are investing that way in he first place.

I will look a little bit more into it, but I don't think that is worth the hassle. At least not for those like me who don't want to having to check what's going on the market.

But I believe you will more average lower price if you use the Smart DCA method because you can guarantee that you purchased on correction price. The traditional DCA can give you much higher average price especially if you keep buying already near the peak of every trend reversal.

Although the difference might be just minimal while the goal is still the same which is to acquire as much as possible so I believe both of them is the best because they have same end goal despite differences on the method of buying.

The classic DCA is an effective strategy for people who are not active traders and don't want to be playing in constant monitoring and timing the market. They don't even have to make any transactions manually themselves anymore, as many exchanges nowadays would offer regular purchase option.
I have my doubts whether the "Smart DCA" is a good term as the approach here would be quite different from the classic DCA and could result in completely different outcome - i.e. in scenario where there are no dips and the price is moving slowly and consistently up for prolonged period (which is rare but theoretically possible).

From what I know, timing the market, or "buying the dips" strategy is, on average, more effective than DCA, but the DCA is still much more convenient for most people.

We need to first understand such particular need for undergoing DCA at first, then after the realization of such, we will have to determine whether to use the classic or smart DCA as according to how we see and picture the market as well with the way we can afford making an investment for our own benefits, after all, we have achieved one thing which is the purchasing power using a particular pattern of DCA, this will help reduce the losses when the market dips the more and our recovery pattern will be very easy to achieve as long as the market pumps sooner again, i can see such being an effective means one can adopt this period also with the situation on how the market is going.

It doesn’t really matter if you are willing to hold for a couple of cycles, you will outperform most, if not all, legacy investments. The main thing is you’re buying regularly, it doesn’t make a whole world of difference if you smash buy a few times or DCA over a long period. Just have some skin in the game.

DCA saves our time and avoid headache to time the market.

I can not disagree because the Smart DCA is somewhat against main purpose of DCA.

When people try to do Smart DCA, they are trying to be smart and time the market. It is oppositely against DCA strategy.

With Smart DCA, it has one more disadvantage, people will have to wait a long time to get in and it is big test for their patience. They can keep waiting for some days, weeks but if they lose patience at the top, buy at top, it's painful.

Unless you understand the time when you need to get into the market, the smart DCA is not going to work for you. It's nothing but an indicator to get into the market based on price. That's why the majority of the people will get it wrong.

The traditional DCA uses a specific day in a month or weak to get into the market. I think that works better in longer run. Because honestly no one is going to know when the price will be at the lowest level.

Both DCA and smart DCA do not require huge capital to start because you are not investing at ones in both. Just that in normal DCA, you will buy bitcoin at certain time interval like a week, biweekly or monthly. But in smart DCA, you will buy bitcoin after price fall weekly, biweekly or monthly. Like saying buying the dip.

Although I do kind of smart DCA at some point, I think for most people it is better to do simple DCA and not eat the head. The smart DCA, as mk4 says is again trying to time the market, which we already know is very difficult. Besides, I remember having seen some studies on the stock market showing that in reality between doing simple DCA or waiting for the downturns to buy there was hardly any difference in terms of profitability in the long term (if the one who buys in the downturns is right, which is a lot to assume).

I, as I say, sometimes I have taken advantage to reload in a market downturn because at that time I had more money available or I have sold at highs to enjoy profits but these are different reasons than trying to make a "smart" DCA.

Personally I prefer to invest in DCA method.
To be honest I choose the DCA method over Smart DCA at the moment. Because I don't have enough money to buy a lot of bitcoins at once that's why I'm not using the smart DCA method.

But with the DCA method I am following I can buy bitcoins weekly or monthly whenever I want according to my own ability. DCA method is very helpful for beginners even if they have little knowledge about investing. DCA method is best for buying bitcoins in very small scale, once we start investing with this method our investment will be very rich.

The DCA strategy assumes that the user does not have any prior knowledge about Bitcoin or trading, and therefore it is a long-term strategy based on the fact that the price of Bitcoin in the long-term trend is bullish, but once you gain some experience, you will realize that it is not the best strategy in terms of profits, but it is the easiest, so there is any improvement on it. A strategy like Smart DCA will be your next step and with more knowledge you will reach the stage of profit from day trading.

BTW, I need to sign in so I can see charts.

This "smart DCA" thing is pretty much just once again trying to time the markets — whereas the point of DCA is to actually accept the fact that 99% of people can't time the markets, hence slowly buy daily/weekly/biweekly/monthly.

So yea, good 'ol boring DCA.

What I actually think is that the DCA method is the best when it comes to accumulating Bitcoin, what you as a person need to do is to act smarter, in the sense that if you are buying a certain amount of Bitcoin weekly or monthly, and you observe that the price of Bitcoin have dropped to an advantageous price, you just have to be smarter by buying aggressively during that period, as long as it does not affect you in financing your basic needs during that period, if you are smart enough during that period, you will definitely thank yourself later, because you will have a lot Bitcoin in your possession during a shot period of time, so to me their is nothing as smart DCA, you, you just have to act smarter as a person.

The smart DCA method is good for investors who have accumulated up to a certain level of bitcoin either close to their bitcoin target, because when you have reached that stage, you will not want to buy frequently, but you will look for time when to buy. Maybe at the dip or using the smart DCA during corrections in the bull run.

However, for a new investor who just started his bitcoin accumulation journey should not use the smart DCA in this stage, because their size of bitcoin is very small or they don't have any. The weekly or monthly regular DCA is the best, because it will give them the opportunity to buy bitcoin often and keep on grow their bitcoin portfolio bit by bit, without skipping any week or month.

Yep, agree this is indeed a smart strategy. If I have the ability to apply it, I will do the same, but I also understand that the principle should not be too stubborn, so I often think about harmony between investment and life. Someone's formula may be suitable for that individual, but it may not always be applied effectively.

Looking back at the method, I'm still a bit skeptical about using it on a large time frame so it's just a simulation for DCA on a small time frame, but in this space if such good timing is certain everything is so convenient.

In other words, buy the dip.

It's not only work during bull season, but during bear season too because you will able to accumulate more coins. The problem of using this strategy is you need to check the price everyday to get updated and you need to set a budget how much you will buy for the dip, the dip could happen continuously in one month and it could be not happen in one month because the market is bullish.

I believe many of us are familiar with Dollar Cost Averaging, DCA but how about Smart DCA.

This thread is for discussion, and I am not concluding Smart DCA is actually Smart and better than DCA. 

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A quick glance gives me that is a good strategy but if I look deeper, it is not actually smart.

By using Smart DCA, simply glance at it, we see entries are below 1W-1M Realized Price but we will miss days, weeks before price drops behind the Realize price (blue line) and miss chances to buy when price is even lower than the Green areas that are entries given by Smart DCA indicator.

Share your thinking about this strategy please.

Personally I see a traditional DCA strategy is better.