I saw the term "DCA out" for the first time yesterday but couldn't get the exact meaning. I assume it is the exact opposite of "DCA in". Can we assume that taking profit and "DCA out" mean the same thing? If you have come across the term "DCA out," before can you explain it more clearly?
I've been doing DCA for a while now, with the S&P 500 and Bitcoin, although I've been with the S&P for quite a bit longer. I haven't heard about the "DCA out" thing and searching the internet, I don't see much information about it either. But I will explain it as I see it.
Let's assume you have $200 a month to invest, then the DCA is simply that, investing $200 for months and months, years and years. The thing is, DCA is usually more complicated than that. The example I gave is fine if you want the money for retirement and don't want to touch it for many years, but what usually happens is this: first, the amount available to invest varies. Maybe you have more income and can invest more. Or the other way around.
It could also be that you had money that you used for something else but in times of bear market like now, you see that the price is cheap and you take advantage of it to buy more, for example $300 a month. Or you received a lump sum. Let's say you already have $10k accumulated but you receive $2k that you can invest and you decide to do so.
So the DCA would be to make more or less regular purchases but taking advantage of bear markets to invest more, and, what happens in bull markets? The opposite. You can imagine that you have been investing for years and you have accumulated $10k today, but in the next cycle the price goes up a lot and in 2025 you have $200k. Then, unless you have planned to use that investment exclusively for retirement, it makes sense to sell part of your investment to take advantage of profits, say $50k, with which you would still have $150k invested and you would continue making DCA month by month.
It sounds to me that JayJuanGee has made a few posts explaining this style of investing.