Dollar Cost Averaging Question - page 3.

hd49728

legendary

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Not your keys, not your coins!

Quote from: tertius993 on December 08, 2021, 03:01:02 AM

Rationale:
1. You will (over time) benefit from the daily fluctuations in price
2. Assuming the buys are made on an exchange the only fees will be the exchange fees for each buy - these are likely to be on a percentage basis and therefore indifferent to one $1400 buy or seven $200 ones;
3. withdrawals to your wallet can be done weekly or monthly as you prefer to minimise network transaction fees

If you do Dollar Cost Averaging, you won't care too much about fluctuation. It is a strategy for people who don't have time to follow market or don't want to have pressure from daily changes of price.

If you let price fluctuation affects your decision and DCA action, you are trading, not DCA.

People advised very good above that min amount to do DCA should be significantly bigger than trading fee and withdrawal fee. Because you should move your Bitcoin by withdrawal from exchange to your own wallet.

Not your keys, not your coins.

franky1

legendary

Activity: 4396

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when doing a bank deposit or withdrawing coins from the exchange. there may be fee's in fixed figure amounts. so do these as little as often

EG dont bank deposit daily and coin withdraw daily.

however with your weekly deposits. once deposited. exchanges do NOT charge hourly,daily or weekly just to hold your value in their custody.
and when making an order in the exchange most orders are % based. thus
10X of $140 at 1% is the same total fee as 1x of $1400 at 1%
so it doesnt matter from a fee prospective how frequently or infrequently you make the exchange orders.

but as said its the deposit and withdrawal fee's that can change things

if an exchange is charging you fixed amount value for an order. or charging you just to hold funds in custody.. find a better exchange as thats not normal/best practice for exchanges

tertius993

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Quote from: crwth on December 05, 2021, 09:42:52 PM

If you are not going to worry about fees too much, I think the best way is to do it daily, so you are averaging at different prices more and more compared to just one price every week. That's if you have the time to cover it all and understand why you are doing it in the first place. Maybe automate the continuous buying of BTC and stick to a tough time so it could be an experiment to share with those interested in it.

I hope you can update us here with what you plan to do.

I agree with this, subject to the exchange fees not being significantly different I think you would be better buying daily.

Rationale:
1. You will (over time) benefit from the daily fluctuations in price
2. Assuming the buys are made on an exchange the only fees will be the exchange fees for each buy - these are likely to be on a percentage basis and therefore indifferent to one $1400 buy or seven $200 ones;
3. withdrawals to your wallet can be done weekly or monthly as you prefer to minimise network transaction fees

Jawhead999

legendary

Activity: 1820

Merit: 1207

I don't recommend to buy Bitcoin everyday since it's time wasting and you need to pay more fees. Weekly and biweekly are the best option for DCA, the market change often so you wouldn't miss the moment. While monthly I think probably you already miss the moment and some people aren't convenience to wait for a month.

If you want to do DCA, all you need is patience and don't regret if you bought at the peak.

crwth

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https://linktr.ee/crwthopia

If you are not going to worry about fees too much, I think the best way is to do it daily, so you are averaging at different prices more and more compared to just one price every week. That's if you have the time to cover it all and understand why you are doing it in the first place. Maybe automate the continuous buying of BTC and stick to a tough time so it could be an experiment to share with those interested in it.

I hope you can update us here with what you plan to do.

tranthidung

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Farewell o_e_l_e_o

I would advice to do it weekly or even monthly. Every month, you will have bitcoin fall that can be big or small but you can take advantage of such fall to maximize your DCA.

It helps you to save trading fee and to have better entry price. Patience is key, even if you are doing DCA. DCA means you regularly accumulate Bitcoin for your portfolio but it does not mean you should not wait for good price to enter.

odolvlobo

legendary

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Quote from: 95Bolu on December 04, 2021, 02:30:47 PM

If I wanted to buy $1,400 of bitcoin every week, should I buy $200 a day or should I buy the $1,400 every week?

One major feature of DCA is convenience, so do whatever is the most convenient, whether it is daily, weekly, monthly, quarterly, or whatever. Ideally, it is set up as an automatic savings program so that you don't even have to think about it. If possible, maybe you would have part of you paycheck automatically sent to an exchange and have the exchange automatically buy.

wajik-tempe

sr. member

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Quote from: 95Bolu on December 04, 2021, 02:30:47 PM

If I wanted to buy $1,400 of bitcoin every week, should I buy $200 a day or should I buy the $1,400 every week?

Any options will be greatly appreciated.

It's better to buy it weekly due to transaction fees.
But another factor that you should also look is the chart, buy when the chart having a correction. If you don't know it yet you will have a 10 minutes read on the internet about chart analysis to know when the chart is in correction state, it will save some worth of dollars for you and you already save for fees by doing it weekly.

Sayeds56

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Eloncoin.org - Mars, here we come!

Quote from: Darker45 on December 05, 2021, 08:41:10 PM

I would rather do it once a week. A daily $200 purchase would not be cost-beneficial. Buying on a daily basis, as others have already pointed out, also means paying fees on a daily basis. That would not be the best way to go. That's wasting some precious Bitcoin.

Also, a weekly purchase would somehow provide you ample amount of leeway in choosing your best entry price. Of course, it doesn't matter much to DCA but, you know, a lot could happen in 7 days. A dip or correction could happen within a week. That's a good entry point.

I think the best strategy to do average dollar cost when you buy Bitcoin or any other asset is to use weekly Technical chart of Support and Resistance and buy at support in at least 3 steps. Your buying should not be time based ( weekly or monthly) but price action based that makes more mathematical sense and this way your trade goes in profit quickly when market pulls up.

Darker45

legendary

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I would rather do it once a week. A daily $200 purchase would not be cost-beneficial. Buying on a daily basis, as others have already pointed out, also means paying fees on a daily basis. That would not be the best way to go. That's wasting some precious Bitcoin.

Also, a weekly purchase would somehow provide you ample amount of leeway in choosing your best entry price. Of course, it doesn't matter much to DCA but, you know, a lot could happen in 7 days. A dip or correction could happen within a week. That's a good entry point.

nullama

hero member

Activity: 1008

Merit: 960

Quote from: 95Bolu on December 04, 2021, 02:30:47 PM

If I wanted to buy $1,400 of bitcoin every week, should I buy $200 a day or should I buy the $1,400 every week?

Any options will be greatly appreciated.

I would say do it weekly. Here's why:

Exchange fees will probably be a big incentive for you to buy weekly instead of daily. It really depends on the specifics of where you're buying, as some charge a fixed fee for every time you deposit/buy. This also applies to withdrawal to your own wallet, you want to minimize those fees as well, so you might do a withdrawal once a month for example.

Another factor that might push you towards weekly buys is the mental one. If you still have fiat around and you see the price going down you might get anxious waiting for the next day to buy more. Once you already allocated the weekly payments, then it's done so no reason to keep thinking about the price for the week.

Because there's no way of knowing if daily or weekly will get you more bitcoin per fiat unit, I reckon it's better to just minimize exchange fees and keep your head clear of price thoughts on the week.

franky1

legendary

Activity: 4396

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if $1.4k is your entire "disposible" value after bills&meals. dont just buy all $1.4k as soon as its paid in.
look to see if the current price is higher or lower then the weekly/monthly average bitcoin price.

if the price is way above the weeks average it may be a hype bubble/spike so dont put all funds into an order. try and wait for the dip.

always try to buy low/sell high

maybe skip the first week. and just keep that first $1.4 spare in your exchange account. then week 2 buy coin. and if the price then goes down you have spare cash to buy the dip when it happens rather then hoping the lower price is still there the following week(3)

dkbit98

legendary

Activity: 2212

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Dollar Cost Averaging is usually done weekly or monthly with smaller amounts of money depending on your budget any paycheck, so you can't really ask everyone to buy Bitcoin with same amount of money.
Investing $1400 weekly makes sense only if you have much bigger paycheck and if you have enough money for food, utilities and everything else .
There are several website doing DCA calculations but dcabtc.com is best I found so far:
https://dcabtc.com/

o_e_l_e_o

legendary

Activity: 2268

Merit: 18711

Where are you buying it from?

The most important thing to consider here is fees. If you are buying it somewhere which charges a flat rate fee, say $2 per trade for example, then you'll lose much more in fees making 7 trades instead of 1. Or you might find that you get charged 1% per trade for the $200 trades, but only 0.5% per trade for the $1400 trade.

Also consider how often you will withdraw your bitcoin to your own wallet and the associated withdrawal fees. On most platforms it will be far cheaper to pay for one withdrawal of $1400 than it will be to pay for 7 withdrawals of $200, and you'll also save yourself more money in the future by not having multiple small UTXOs which need consolidated.

95Bolu

newbie

Activity: 15

Merit: 24

If I wanted to buy $1,400 of bitcoin every week, should I buy $200 a day or should I buy the $1,400 every week?

Any options will be greatly appreciated.

Topic: Dollar Cost Averaging Question - page 3. (Read 396 times)