What DCA(Dollar Cost Average) does for you

Dzwaafu11

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Quote from: asarfiar on October 31, 2024, 11:09:46 AM

DCA plays an important role in investment, which we do consider important in long-term investment. Since DCA is a matter of long-term planning, in that case the investor has to adopt the DCA method. If you carry out investment activities outside the Dollar Cost Averaging (DCA) method, then you can be immersed in the volatility of the market

Exactly. That is why DCA is the best method to invest in bitcoin because when you use DCA you won’t boarder whether the market is at dip or high; all you want is the price to reach your target before you sell, and also DCA has less risk compared to any other method you can use to invest in bitcoin; furthermore, it can make it easy for you to set an amount that you can be investing based on your source of income. You can be investing using the DCA method gradually, and before you know it, you will be able to accumulate enough bitcoin in your wallet.

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Quote from: Ruttoshi on November 11, 2024, 09:27:49 AM

Transaction fee should be paid once, you are ready to send your bitcoin from the exchange to your private wallet and be careful of very small UTXO.

When you use a centralized exchange, and make a withdrawal request, exchange will approve your request and proceed that withdrawal for you. You don't have to consolidate many inputs or use many inputs from DCA for your withdrawal. The exchange does it for you and they charge you all in withdrawal fee that is expensive.

When you make deposit on centralized exchanges, they will automatically move your deposit to other wallets, like their cold wallets, or hot wallets but for input consolidation. Later, when you withdraw your coin, they proceed it from their wallets.

Generally they don't do it free for you and at the end they charge you very expensive withdrawal fee.

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Quote from: Jewan420 on November 10, 2024, 07:37:45 AM

Quote from: Alphakilo on November 02, 2024, 10:58:08 AM

Whenever you decide to do Dollar Cost averaging you should consider the times when the fees are low. This is one aspect of this conversation that is not talked about a lot. And I know the community wants to make DCA as simple as it can be but what to do when the fees are high but you still have to DCA.
Assuming that transaction fees are always low then DCAing every other week is ideal if your investment money is small. DCAing every other week is not ideal if the transaction fees are high and the investment money is small like say $50. In this case either fortnightly or monthly is ideal.

Many of us have different timing plans for DCA. Many do weekly DCA or many do monthly DCA. Many even do fortnightly DCA. Frequent buying in DCA method is not a good decision. Because, we have to keep the transaction fee in mind. You pay a fee each time you buy, but your transaction fees will increase if you buy more frequently. Therefore buying more than 4 times a month is not a good decision. If your amount is more then you can buy 4 times in a month. If your money is less then it is better to buy once or twice a month. Because we need to balance investment and transaction fees. Buying more than four times a month may result in higher transaction fees. Determine how often you will buy based on your budget.

Don't forget that the amount that you are using to buy once in a month can be spread in the number of weeks for that month and it will be the same. Transaction fee should be paid once, you are ready to send your bitcoin from the exchange to your private wallet and be careful of very small UTXO.

DCA has given everyone both the rich and poor the opportunity to invest in bitcoin and grow their bitcoin stash overtime as long as they can afford a little amount to invest with regularly. If not for DCA, I wouldn't have been able to acquire the quantity of bitcoin in my possession.

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Quote from: Olatundespo on November 10, 2024, 09:43:14 AM

If you have decided to deposit bitcoins and want to do DCA for long term, weekly or monthly deposit plans can be beneficial and transaction fees should not be a big obstacle.

Investment means using your money to purchase bitcoin. You can not deposit bitcoins when you didn't have it because you did not buy it. Roll Eyes

You don't pay transaction fees for your purchases, but trading fees. You don't pay transaction fees for your withdrawals from exchanges too and what you pay is actually Withdrawal Fee.

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Quote from: Jewan420 on November 10, 2024, 07:37:45 AM

Quote from: Alphakilo on November 02, 2024, 10:58:08 AM

Whenever you decide to do Dollar Cost averaging you should consider the times when the fees are low. This is one aspect of this conversation that is not talked about a lot. And I know the community wants to make DCA as simple as it can be but what to do when the fees are high but you still have to DCA.
Assuming that transaction fees are always low then DCAing every other week is ideal if your investment money is small. DCAing every other week is not ideal if the transaction fees are high and the investment money is small like say $50. In this case either fortnightly or monthly is ideal.

Many of us have different timing plans for DCA. Many do weekly DCA or many do monthly DCA. Many even do fortnightly DCA. Frequent buying in DCA method is not a good decision. Because, we have to keep the transaction fee in mind. You pay a fee each time you buy, but your transaction fees will increase if you buy more frequently. Therefore buying more than 4 times a month is not a good decision. If your amount is more then you can buy 4 times in a month. If your money is less then it is better to buy once or twice a month. Because we need to balance investment and transaction fees. Buying more than four times a month may result in higher transaction fees. Determine how often you will buy based on your budget.

If you have decided to deposit bitcoins and want to do DCA for long term, weekly or monthly deposit plans can be beneficial and transaction fees should not be a big obstacle. You can add that fee on top of the purchase price and charge it to subsequent sales. When you buy something from a super shop you have to pay extra fees on some products which is normal and you should gladly pay it. Similarly, paying transaction fees for investing in Bitcoin should be considered a normal process.

Investors who have weekly income should take weekly decision in doing DCA otherwise discretionary income might be spent and investors who have income in monthly form should decide to deposit bitcoins from discretionary income to DCA method accordingly. You should be flexible about Bitcoin transaction fees rather than being rigid so that fee don't become a major obstacle when holding Bitcoin.

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Quote from: Alphakilo on November 02, 2024, 10:58:08 AM

Whenever you decide to do Dollar Cost averaging you should consider the times when the fees are low. This is one aspect of this conversation that is not talked about a lot. And I know the community wants to make DCA as simple as it can be but what to do when the fees are high but you still have to DCA.
Assuming that transaction fees are always low then DCAing every other week is ideal if your investment money is small. DCAing every other week is not ideal if the transaction fees are high and the investment money is small like say $50. In this case either fortnightly or monthly is ideal.

Many of us have different timing plans for DCA. Many do weekly DCA or many do monthly DCA. Many even do fortnightly DCA. Frequent buying in DCA method is not a good decision. Because, we have to keep the transaction fee in mind. You pay a fee each time you buy, but your transaction fees will increase if you buy more frequently. Therefore buying more than 4 times a month is not a good decision. If your amount is more then you can buy 4 times in a month. If your money is less then it is better to buy once or twice a month. Because we need to balance investment and transaction fees. Buying more than four times a month may result in higher transaction fees. Determine how often you will buy based on your budget.

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Quote from: Porfirii on November 10, 2024, 06:32:55 AM

I think that the best way to do that is to think on percentages rather than in cents or dollars. As you said, fees are important if you make many little purchases, but if you buy less often or higher amounts at once, fees get diluted.

Capital availability decides your repeat purchasing time too. Like if you can have only $10 weekly for investment, you will need to wait like 5 weeks or 10 weeks to do each DCA round with either $50 or $100 purchase. It will save your trading fees, and your withdrawal fee too.

People with big capital don't have to care too much about withdrawal fee or on chain transaction fee when moving their bitcoin. Because withdrawal fee or transaction fee is surely too small compares to their capital value or withdrawal value.

Quote

Anyway, if you will lose a great opportunity to buy just before the FOMO like what we are seeing these days, then perhaps you should forget about high fees and buy before it gets more expensive.

Buy in a bear market, especially 1 or 2 years since ATH of last market cycle, is very good for accumulation, reduce risks of buying in middle of correction from ATH to bottom, and it reduces your entry cost so that in a next bull market, you will have better ROI.

During a bull run, simply do DCA if they have capital for it, and if you want to invest more.

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Quote from: Alphakilo on November 02, 2024, 10:58:08 AM

Whenever you decide to do Dollar Cost averaging you should consider the times when the fees are low. This is one aspect of this conversation that is not talked about a lot. And I know the community wants to make DCA as simple as it can be but what to do when the fees are high but you still have to DCA.

Assuming that transaction fees are always low then DCAing every other week is ideal if your investment money is small. DCAing every other week is not ideal if the transaction fees are high and the investment money is small like say $50. In this case either fortnightly or monthly is ideal.

I think that the best way to do that is to think on percentages rather than in cents or dollars. As you said, fees are important if you make many little purchases, but if you buy less often or higher amounts at once, fees get diluted.

So maybe you can say: I'm willing to pay up to 1% in fees, and 50 cents in fees are fine when buying 50$, but not 3 dollars in fees when buying 50$, but yes when buying 300$.

Anyway, if you will lose a great opportunity to buy just before the FOMO like what we are seeing these days, then perhaps you should forget about high fees and buy before it gets more expensive.

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Quote from: hd49728 on November 02, 2024, 02:03:41 AM

It is my typo. 2 years equal to 24 months, not 48 months.

And in fact you will have to invest somewhere between $90 to $100 weekly in 24 months. Each year has more than 48 weeks, it's actually 52 weeks. Perhaps when I typed that post, I confused between weeks and months like I thought of weeks but then typing 48 as months, I am sorry.

If you invest $100 weekly in 48 weeks, total invested capital is $9,600.
If you invest $100 weekly in 52 weeks, total invested capital is $10,400.

With that tool, you can try to see DCA effect for your capital with duration in a bear market and in a bull market.

No problem and I also did not consider the fact that each year if have 12 months it does not mean one month will always be 4 week (28 days) as there are 2 or 3 extra days always there so yeah 52 weeks is a good number for 1 year and I plan to invest till next ATH which probably be 4 years long cycle.

1 year if have 52 weeks then 4 years will have 208 weeks and a weekly investment of $100 (which is impossible for me because I live in middle east) I will have more than 20800 worth of BTC right?

But yeah I think if I were able to save $100 per week then maybe in 2 years I would save $10k but I just know that's not possible for me at the moment as I also don't join gambling projects so other projects are so rare like the one I am joining now therefore I won't depend on these side jobs to make $100 per week that's why I mentioned in the first place I have to find a good job or side income source.

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Whenever you decide to do Dollar Cost averaging you should consider the times when the fees are low. This is one aspect of this conversation that is not talked about a lot. And I know the community wants to make DCA as simple as it can be but what to do when the fees are high but you still have to DCA.

Assuming that transaction fees are always low then DCAing every other week is ideal if your investment money is small. DCAing every other week is not ideal if the transaction fees are high and the investment money is small like say $50. In this case either fortnightly or monthly is ideal.

hd49728

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Quote from: Faisal2202 on November 01, 2024, 10:52:59 AM

Quote from: hd49728 on October 31, 2024, 10:18:19 PM

It will require you to do DCA weekly with $100 each week and do it regularly in 48 months.
https://dcabtc.com?sd=2021-11-01&sda=3_years&f=weekly&d=2_years&ac=10000&c=false

I know the DCA plan is possible, that's why I targeted for $10k and thanks a lot for providing these sources but I did not understand how you calculated that if I will invest $100 every week for the next 48 months and let's say each month have 4 weeks so 48*4=192 Weeks and each week investment is if $100 then its 19,200$ not $100 the website you provided is a good source I also spent good time on this site but see it allows us to calculate our past, like if we would have bought in 2021 and after three years how much we would be making now.

It is my typo. 2 years equal to 24 months, not 48 months.

And in fact you will have to invest somewhere between $90 to $100 weekly in 24 months. Each year has more than 48 weeks, it's actually 52 weeks. Perhaps when I typed that post, I confused between weeks and months like I thought of weeks but then typing 48 as months, I am sorry.

If you invest $100 weekly in 48 weeks, total invested capital is $9,600.
If you invest $100 weekly in 52 weeks, total invested capital is $10,400.

With that tool, you can try to see DCA effect for your capital with duration in a bear market and in a bull market.

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DCA is a strategy where you can start your investment with a small amount of money. Also, if you are not very experienced in investing then this strategy is considered best for you as your investment will grow with time and your experience will also increase. As DCA strategy can be started with very small amount of money, now all professional people are suitable to invest in this method.

The investor should have a fixed source of funds to invest in this method so that he can continue to invest comfortably regardless of the investment.

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Quote from: Sebas.tian on October 31, 2024, 10:20:09 PM

Dollar cost average is a strategy some investors use to grow their Bitcoin and cryptocurrency in their portfolio by continue purchasing Bitcoin and cryptocurrency in the bearish season and hold for a long term to fulfill the purpose of holding the coins in their portfolio.

Dollar Cost Averaging (DCA) this investment strategy is suitable for everyone. Moreover, DCA is an investment strategy that is applicable for all market periods and not just for bearish seasons. The main objective of investing in DCA (Dollar cost Averaging) strategy is to reduce the average cost of your investment i.e. your average cost will remain the same regardless of whether you buy bitcoins at any moment of the market for investment.

For example, if you take the initiative to buy $40 worth of Bitcoins on a weekly or monthly basis, then if the price of Bitcoin rises, you can buy a smaller amount of Bitcoins at that price, and if the price of Bitcoins falls, you can buy more Bitcoins with the same amount of money. Your average cost of investment will remain the same whether the market is up or down.

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Quote from: Sebas.tian on October 31, 2024, 10:20:09 PM

Dollar cost average is a strategy some investors use to grow their Bitcoin and cryptocurrency in their portfolio by continue purchasing Bitcoin and cryptocurrency in the bearish season and hold for a long term to fulfill the purpose of holding the coins in their portfolio. Dollar cost average strategy, it will make you to be bold in accumulating your coins in the bearish season or bullish season, because the investors using that strategy know that they are not selling the coins in a low price, because they have a positive target to catch up with in the nearest future. It will increase your income when you know how to use the dollar cost average strategy very well, because many investors use it for income purposes but as a newbie, i will advice you to have the knowledge and to be financial buoyant before making use of the dollar cost average method to accumulate Bitcoin and cryptocurrency.

Yes you are right Dollar cost averaging is smart way for people investing in cryptocurrencies to increase their holdings. It involves regularly buying coins no matter market is going up or down. For this purpose investors should be disciplined patient and financially strong and secure. This helps reduce risks and achieve long term growth. Beginners should learn about this good strategy and they should have kept in mind that they have enough money and set clear goals before starting. With doing so they can earn extra money without actively working for it and navigate the complex cryptocurrency market with confidence.

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Quote from: boyptc on November 01, 2024, 05:09:19 PM

Here it goes for me.

I am no economy, investment and finance expert.

But with this strategy, it made me look like I am a genius because of the results that it has gotten me.

I was able to beat those financial guru friends that I have and it does look simple at all but DCA isn't for everyone that are not willing to learn and become consistent with it.

Not for everyone doesn't want to do it since maybe people have difference preference the way how they approach their investment and what they want to happen on it. But for those people want to use it and eager to get the best result for their investment then provably its for everyone doing thinking about doing that. Since there's really no need to do technical matters and we just need to act consistently on doing this method also our accumulation. There's nothing much to think about since our only main concern is to accumulate and hold our bitcoin for long time.

This is what those short term thinker people since maybe they think that bitcoin trading is the best option for them and provably that later on they provably realize that somehow they are losing to much on those trades they made.

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The DCA strategy is a good strategy for accumulating bitcoin for long-term purposes. With the DCA strategy, you will eliminate the stress of trying to figure out when it is best to buy bitcoin, which could cause you emotional damage if you buy bitcoin at a high price. The DCA strategy allows investors to buy bitcoin even if it is increasing or decreasing since they know they will be buying bitcoin at different prices either on a weekly or monthly basis. One of the benefits of the DCA strategy is that it allows investors to control their emotions when they are accumulating bitcoin.

Quote from: IceLincoln on October 31, 2024, 07:14:20 AM

But remember investing in bitcoin has it’s risk, so you shouldn’t invest all your money/savings but if your going for a long term investment Bitcoin DCA is a wise choice.

I will prefer using money that you will not be needing for 4-10 years or more to invest in bitcoin so that you will not depend on your bitcoin investment to sort out your daily expenses.

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Here it goes for me.

I am no economy, investment and finance expert.

But with this strategy, it made me look like I am a genius because of the results that it has gotten me.

I was able to beat those financial guru friends that I have and it does look simple at all but DCA isn't for everyone that are not willing to learn and become consistent with it.

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Quote from: IceLincoln on October 31, 2024, 07:14:20 AM

Investors who put a huge sum of money into the market at once, run the risk of buying at a high, which can be very uncomfortable and upsetting if prices were to fall. The potential for this price drop is called a timing risk.

Not always, there are times when buying at once would have been a better options as you get more quantities of Bitcoin during this time than DCA. I don't denied the facts that DCA is the best strategy for investing in Bitcoin but when you see the opportunity to buy the bottom of the market, don't miss it but take it with full effort.

Also you have to know yourself because it isn't everybody that can stay true to DCA and not use up the money for something different. Know yourself and know how good you're with money and following your plans before you start to DCA.

For some people, it's just better they buy Bitcoin once and hodl (especially for people with very long term plans of holding for 10yrs+.) buying Bitcoin that very moment and just hodling would be advisable.

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Quote from: PrivacyG on October 31, 2024, 10:46:48 PM

Is Smart DCA not Trading though? It looks like it to me. As far as I know at least, the point of doing Dollar Cost Average is precisely not requiring any knowledge about the Markets and simply purchasing Bitcoin every now and then with out caring about what the Price is at the time. If you do Dollar Cost Average by researching Charts and Markets, that to me is just Trading. But I may be well wrong.

You’re right it’s simply looks like trading but it is still DCA because you’re still catching trades at different levels and accumulating them and at the end is still averaging so it’s still DCA but not the regular usual DCA. The only difference is that one needs the knowledge of fundamentals and most importantly that of technical analysis to analyze the chart. Just like you said it is not necessary to have it but sticking to the timeframe buy is ok. But regardless no knowledge is actually a waste.

A smart DCA by reading of the chart is a double edged to get more proportions imagine looking at the charts and seeing the coin at a low and you are predicting that it will bounce back from that low later before your next manual DCA accumulation period, this knowledge will help you to buy more at lower price than the manual one, the only disadvantage is don’t use it alone if not you will miss some lows while waiting for further dip, use the usual manual method and accumulate more when the chart shows a good dip

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Quote from: hd49728 on October 31, 2024, 10:18:19 PM

Bitcoin's Market cycle can help you to plan your DCA in a next bear market.
Bitcoin price history by years.

Assume that you have two years of bear market or a little bit longer or shorter, here we count 48 months for making a DCA plan. Now with this assumption of bear market length, let's see your capital for DCA is $10,000.

It will require you to do DCA weekly with $100 each week and do it regularly in 48 months.
https://dcabtc.com?sd=2021-11-01&sda=3_years&f=weekly&d=2_years&ac=10000&c=false

You can do it with your signature campaign in bitcoin forum and with part of your salary, so I really see this DCA plan is possible.

I know the DCA plan is possible, that's why I targeted for $10k and thanks a lot for providing these sources but I did not understand how you calculated that if I will invest $100 every week for the next 48 months and let's say each month have 4 weeks so 48*4=192 Weeks and each week investment is if $100 then its 19,200$ not $100 the website you provided is a good source I also spent good time on this site but see it allows us to calculate our past, like if we would have bought in 2021 and after three years how much we would be making now.

It's just a good calculator to help us understand will doing Lump Sum in 2021 or DCA from 2021 to now, which would be more profitable.

But still thanks for encouraging, to make $10,000 I have to do a DCA on weekly basis of 48$ for the next 4 years (48 month) hmm I think I can do DCA of $48 for every week I just have to find another source of income that can make me 192 a month. I know with time my profits will help me to reach $10k but I think I should not count them.

Topic: What DCA(Dollar Cost Average) does for you (Read 456 times)