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... 1
BTC 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 1
BTC 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