Dollar-cost average, how to do it right!
Investment is 80% perseverance and 20% patience.
This means that skill has NADA to do with investing, and that’s true!
The most successful investors outplayed wall street by being patient and buying dips continuously!
Let’s talk about DCA and its importance in crypto!
Dollar-cost averaging is an extremely famous investing strategy.
It means that you will buy an asset every specific period of time, day/week/month at a certain time, regardless of its price.
I.E: Buying $BTC on the 1st day of the month regardless of its price
This strategy is famous because it’s simple and doesn’t require a lot of technical skill.
It’s also historically the most profitable investment strategy.
Studies found that DCA investors outperformed people who repeatedly tried to time the market.
This is because it’s super hard to time the market as it plays by its own rules.
Human emotions are messy. Human emotions control the market, can you really time that? Kinda hard as each bear market succumbs to different scenarios that lead to capitulation.
But is DCA the best strategy for the crypto market?
Yes and no.
The crypto market is known for its crazy volatility. If you buy during the height of the bull run, you will lose 90–99% of what you invested!
This is why DCA doesn’t always fit the crypto market.
However, the DCA strategy can be tailored to fit the crypto market.
Don’t invest throughout the year but throughout accumulation periods!
Here is a thread by explaining market strucutre for reference
https://twitter.com/IamZeroIka/status/1649440654236450818
What you wanna do is DCA whenever the market goes down. So your plan goes like this
- Grinding all year long to get hard earned money.
- Save as much as possible from that money.
- Whenever FUD controls the market and you see double digit losses start DCA
FUD over you start repeating again. Save money as much as possible and DCA IN THE NEXT FUD CYCLE.
Believe me, FUD never stops. It keeps coming. If you miss a chance you will ALWAYS have another one.
For instance, the market witnessed four FUD cycles:
- June 2022 when inflation hit 9.1%
- December 2022 after the FTX crash.
- March 2023 after USDC depeg.
- June 2023 the FUD we are going through now.
They all presented great opportunities to DCA your hard earned money in crypto.
Smart money works hard all year long to try to catch these incidents.
But that require you to set clear goals and build discipline.
You will need to control your emotions and greed. If the price keeps going down, you don’t know when the reversal will happen.
This is why you set your own Buying zones.
For instance, I have a buying zone for $WOO which is below 0.20$
Whenever it dips below I buy. It dips more? I buy more ETC ETC
Repeat this for any other coin. SET YOUR OWN GOALS!
📣Not financial advice, so make sure to DYOR!
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