Topic: What DCA(Dollar Cost Average) does for you - page 2. (Read 456 times)

Investing using the DCA strategy is just convenient for those who are not experts in analysing the market. That is why newbies especially are advised to use the DCA strategy where they can conveniently  invest without mounting so much pressure on themselves and they would still be able to manage their risks effectively.  This does not mean that the DCA strategy is not without it's own challenges. However, what matters most here is the ease of investing.

Those who on the other hand wish to buy lump sum at once are not in any way making a stupid investment decision. They must have understood the risks involved in buying lump sums and would even be earning more returns if they are able to perfectly time the the market.

Some can decide to use the hybrid strategy where they make an initial huge purchase and keep adding up in small amounts using the DCA strategy.  Whatever strategy one intends to use will depend on their experience and risk tolerance.

Buying at ago is not a bad thing, because at a point you will also learn to know that DCA is not only the strategy to accumulate bitcoin. You will still come across lump sum and buying the dip. So in this case lump sum could be said to be an extra amount or bonus a person or an investor received from may be a place of work or a money won from lottery which is used to buy bitcoin at once or at ago. So this kind of money invested are usually not for buying bitcoin at each dip or DCA. so In this case it can't be classified as running a risk of buying high as you said . because it was not for the purpose of Trading nore dip nore DCA, but just to buy and stack for future propose and not for imidiate use. When you think of lump sum think of an amount that will not be needed anytime soon just like the DCA accumulation amount is for a longer time which makes both appears to be one despite it comes in different ways.

DCA strategy is not a strategy to buy more bitcoin when the price is low and or buy less when the price is high. It is the buying of business regularly either every week or every month at any price of bitcoin. But although Buying each dip is a strategy to buy bitcoin when its dip, to leverage on the opportunity to accumulate more or to recover the amount lost when you may have bought bitcoin high during the DCA.

100million SATs makes up 1bitcoin or you can say 1BTC is equal to 100million SATs

If you continue to stack sats for a long period, your small weekly or monthly purchases can grow into a large sum of bitcoin savings.

Crypto is always use to describe shitcoin or altcoins, it will be better you preferably use the bitcoin as people don't accumulate shitcoin.

DCA is the best solution in Bitcoin investment, especially for Newbies, to reduce the impact of price fluctuations traded in the market by buying at varying average prices. In addition, the DCA strategy can help investors reduce psychological risks by avoiding counterproductive decisions due to greed or fear in investing. Newbie investors also do not need large capital to start investing because what is needed with this strategy is consistency. They can also build investment habits with small capital without having to wait for the right time, as long as they have capital ready to be used for investment, it can be done at any time, DCA can also reduce the risk of Volatility.

the DCA is an anti procrastinators methord that helps you buy Bitcoin without giving excuses of Bitcoin being at a certain value and that's why you are not able to buy. It's an approach for those who are ready to start small and do it consistently for a number of years untill they've achieved a particular number of accumulated Bitcoin in Thier wallet. It doesn't guarantee that you will always buy at a cheaper rate and in most instances, the likelihood of you buying at an high price might be much but doing it for multiple circle will place you above the range of prices you started accumilating the Bitcoin.

One thing I've learned about the method of DCA is that it takes away the idea that owning Bitcoin is for the rich or that you have to buy upto one whole Bitcoin or at least half of Bitcoin at a time before you consider yourself a Bitcoinner. It allows both the old, new and even the whales to buy Bitcoin routinely through that methord.

Dollar Cost Averaging is in my opinion the only Investing strategy that fits everybody.  If you do not have the time to do research about the Market, this is the solution.  If you have the time but feel overwhelmed by the information, this is the solution.  If you feel like you are late and do not know where to start, this is the solution.  I can not think of any scenario where Dollar Cost Averaging hurts your Portfolio, except if you are looking to day trade or make large quick Profits.

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.

Dollar Cost Average aka. DCA is a strategy that is applicable and efficient for all market phases, not only restricted for practice in bear market. You can do simple traditional DCA or Smart DCA but they are all working well for your portfolio if you are an investor with holding strategy for a long time.

It's more simpler to use DCA (traditional DCA), because smart DCA requires you to be an experienced investor with deep understanding about the market.
DCA vs Smart DCA, what do you choose?

Saying DCA can be used only for a bear market, is wrong.

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.

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.

You are right once we are focusing on buying BTC and planning to accumulate some then we easily overcome our urge to buy unnecessary things or even the new models of any machinery too that we usually buy but with this mindset, we won't, I exactly followed this method and abled to hold some amount and now I will try to accumulate more in this bear market as well so I am trying to make extra money by finding small jobs.

I hope I will have enough money in this bear cycle that I will be able to accumulate BTC of at least $10k. I know some will say we should make our aim in satoshi not in dollar but that's suits best for me as to think better. DCA saved me money, helped me build portfolio, and to be honest while I was doing it I did not knew I was DCAing haha.

Yea,
The problem with one time purchase is targeting the low and be very sure that it is actually the low, and not from low to the lowest.
Another advantage of DCA is the idea of invest-as-you-earn or invest-as-you-can. While giving you the opportunity to buy in mitigated loses, you can also buy according to your financial strength.
The greatest advantage is that it doesn't actually require too much knowledge of the chart and the candles. It is the best and non technical way of investment.

DCA is a practice and this practice have helped many newbies to accumulate Bitcoin with ease and at no pressure at all since they are just putting in small amount out of their cash flow to buy Bitcoin at regular intervals, this approach is much less risky to investors and easy to understand and cope with, that is why most newbies have accepted and adopted DCA as the startup approach for them since it less they risk.


You have to be careful also when you buy while using this approach, because using DCA on a wrong market timing can result into crisis along the way, since you can mistakenly be buying when the price of Bitcoin is at high price which means you wait longer to see positive results from your investment.

Investing in general involves risk, and investing in Bitcoin is no exception to this. But if you use DCA, you will get a better average BTC purchase price, but this does not mean that your risks will be lower than with a one-time purchase at a low price.

DCA don't give a huge benefit to small investor to turn his money into big profit because if you have 1000 dollar and you are buying every week or at every dump of 2% with 100$ then you won't make any big difference and big profit because you might invest that money in a week with dump and pump percentage method and even if you chose time method then you might have a chance to make some profit but still transforming to big investor is not possible.

Only a Lump sum can make you a big investor with a small investment. The DCA method doesn't decrease market volatility, but it decreases the pressure of market volatility on you. I think English is not your first language, haha. Don't mind, please.

But I agree with you as DCA is good for any type of scenario in the market and without even a plan you can accumulate BTC over time with DCA so to make that accumulation profitable either we need plan or we need to wait for a long time.

Just reflected back at when i was new into bitcoin and i was often hearing about the DCA strategy, was lost for some time before i came across some topics that helped me to know what it actually is all about. You did well on your explanations about the DCA strategy and i hope others who have been looking for a thread about some explanations regarding the DCA strategy will find it helpful. DCA strategy have been considered as the most convenient method of investing in bitcoin for either a beginner or anyone who don't have enough funds to buy bitcoin at once or those who finds it more easier to be buying same amount of bitcoins within different periods of time while they grow their portfolio in the long run.

Dollar cost average has given me the opportunity to be able to handle other financial responsibilities without giving up the possibility to reach my goal of owning 1 Bitcoin. There are other amazing things which dollar cost average does for me as you have mentioned however I needed to personalize it to my current situation. Infact it has become so automatic that I look for to the specific period to DCA.

The use of this purchasing pattern is mostly advisable for the newbies and even those that are experienced and couldn't afford to risk their investment more on their assets.

Another added advantage for using this strategy is to be able to reduce the cost for loss, whereby there is reduced level of taking risk, while investors can find the best and affordable entry point to the market.

If you are this concerned about investing following mainly the DCA strategy or even anyone then this thread can be of importance Buy the DIP, and HODL! .

In the context of your explanation, DCA strategy is preferred but other strategies are all effective, it basically depends on when and how it is being applied. During the DIP, most investors might consider taking advantage, this implies purchasing that particular DIP with a lump sum of money higher than the usual amount. All strategies are unique and goes along to build a better portfolio.

I don't think that's true, because inasmuch as your plan is to invest for a long term, then there is no need to be worried about the price of Bitcoin when you bought it, because in a long run, it's price will always increase. It's only people who have a short investment timeframe that should be worried.

Though the fluctuating price nature of Bitcoin might be seen as an issue, its still nothing literally to be worried about for those who had the mindset of long term. Mere doing a Dollar Cost Averaging method is far safer than trading, hence, it's a good strategy for both newbies and those who wishes for a better alternative to save money far better than fiat bank.

Well hope you aren't amongst those people who got the idea about cryptocurrency being very easy.. with hen recent emerge of tap games and airdrops, a lot of newbie has began to see crypto as an easy way to get rich of which it isn't.. well DCA like you said is the best method for any investor to acquire coins without having to wait a long time for market to dip. With DCA, all you have to do is to set a certain amount of money and at a particular time you purchase your coins.. you can also increase the amount your buy once you have a raise in your source of income...

Yes, with DCA the risk will be somehow minimized. With DCA, there is no need to time the market. As long as you do DCA regularly regardless of its price, rest assured your investment portfolio will grow and attract more potential profits, leaving your emotions not at risk anymore. And with discipline and consistency, DCA becomes more valuable and profitable.