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Author Topic: Why the only safe method right now is to Dollar Cost Average Bitcoin  (Read 205 times)
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June 15, 2018, 10:55:02 PM
 #21

DCA investment strategy works best on declining markets but yields less profit on increasing markets
I don't get the last thing...
It yields less profit compared to what?
compared to initial full investment at once, lumpsum investment in the beginning

Because if I would have bought  1BTC at 3000$ is far better than buying 1/4 at 3000 , 1/4 at 4000, 1/4 at 5000 and 1/4 at 6000. In the second scenario, I would have spent 4500$ for that BTC so it only beats the strategy of waiting and buying when the price is at the ATH.
DCA doesn't work that way.
Instead of fix amount bought, you're buying with fixed amount investment spread equally at scheduled times
for example... 1BTC with $7,500 at once compared to
DCA is buying bitcoin with $1,250/month in the course of 6 months, will total less than 1BTC on increasing markets
so I'm losing 'potential gain' of my money (also have less BTC) but I haven't actually lose my real money
it's just our different perceptions on the 'profit' matter... don't take it too seriously

As I said, DCA works only in a declining market. If the market goes up you're losing money with it.
I said the same thing but I don't see it as "losing money" because I  haven't gained it if I haven't bought it
I prefer to see it as losing "potential gain"

I don't think that there is a technique that is bulletproof, even hodl will at some point fail.
much agree on this. every technique has its own dis/advantages,
we must choose the best one based on our strategy and prediction against market  

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June 16, 2018, 09:54:49 AM
 #22

Yeah I
Because if I would have bought  1BTC at 3000$ is far better than buying 1/4 at 3000 , 1/4 at 4000, 1/4 at 5000 and 1/4 at 6000. In the second scenario, I would have spent 4500$ for that BTC so it only beats the strategy of waiting and buying when the price is at the ATH.
DCA doesn't work that way.

Yeah, it doesn't work that way  Sad
Don't know what was on my mind when I was typing that....
I should have said it like "use 1/4 of your money at 3000,4000,5000", my head was doing the math and my hands were typing something else.. Smiley

And the results of the BTC bought are 0.25, 0.18, 0.15 , 0.12 to a total of 0.7 compared to a full one considering the initial full investment. So, the "potential gains" in my scenario that you would have "lost" are 0.3 BTC and if we consider the top price of 6000$ the "avoided profit"  Grin is actually 1800$.


I said the same thing but I don't see it as "losing money" because I  haven't gained it if I haven't bought it
I prefer to see it as losing "potential gain"

Yup, to me this technique is about avoiding stuff, be it profit or loss.
It does reduce loss on a downtrend market but it can't be labelled as "safe".




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June 16, 2018, 10:51:12 AM
 #23

Dollar cost averaging is also a pretty decent strategy to use when you have a BIG holding but want to make the average price drop down. If you bought 1 Bitcoin at $10,000 last month or so and now purchased another 1 BTC at $6,500, the cost for your Bitcoin would then be $8,250 per Bitcoin. It could be considered throwing good money after bad, but that's a pretty decent strategy when a volatile market moves against you for a sustained amount of time. Usually you can get that bump upwards one day or week to then be even.
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