I found this article as very timely and informative. Below is the gist of the article. Credits to the owner
https://cryptosis.io/hodl-vs-average-down/Do you cut your losses and try to jump onto something with more upside?
Do you hide behind the sofa and cry until it's all over?
Do you just HODL because we've been through this before? Telling yourself that the market moves in cycles and soon enough your coin will be up again?
Investors that are hedging bitcoin like hoarders or ‘hodlers’ for much longer term gains use a strategy called ‘Dollar-Cost Averaging’ (DCA). This technique is used by those who believe in the long-term progress of bitcoin and other digital assets. Using the DCA method means purchasing a fixed dollar amount of bitcoins no matter what the price happens to be. Further, the DCA technique requires purchasing the fixed dollar price using a scheduled calendar as well.
How To Decide Whether Or Not To Average DownIf you're a technical analysis expert, you may have an entirely different strategy to what we've been using. For us, the only time we looked at the chart was to take a quick glance to see where the price was in terms of the bigger picture. Was it at an all time low? Did it appear to still be sliding?
We also looked at the entire market context as well.
If your coin goes down in value for no real reason other than the whole market is going down, then that could be a good sign to load up some more. It's also important to compare how your coin's value has changed in both BTC and USD.
So for our holdings, a few of them were ones we picked up at ICO. For these coins, we visited Reddit, Google, Twitter, and CoinMarketCal to see what news had been released recently, and to see what the various communities were saying about the projects.
With some, it was like harder work than others. Some teams are not that active on Reddit and prefer Telegram, Slack or Discord, whereas other teams are super active on Reddit but completely ignore Telegram. Your first piece of homework is to try and figure out where the community is.
Once you've (hopefully) found some news or recent updates from the project, you can start to ask yourself
if this coin is promising in the short term.With averaging down, you're deploying funds, and you most likely don't have an unlimited amount of them. This means you want to stick your money into a project with the best near term prospects.
If you have multiple options for averaging down, as well as other potential projects to get into for the first time, you'll need to make a decision about the best way to place your funds.
Are you guys HODL'ing through the rocky markets or have you found a project worth doubling down on?
