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Author Topic: best DCA strategy  (Read 99 times)
fedemining (OP)
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November 09, 2020, 09:53:25 AM
 #1

i was wondering what would be the best dollar cost averaging on btc based on historical data.
my first thought is to increase and decrease by a percentage regards if price is relative to a significant moving average.
for example if i want to average 100 usd per month. i could spread those 100 usd over 30 days = 33 usd per day.
now i can increase by a percentage when price is under the 50 SMA and decrease by a percentage when price is over the 50 SMA.
what i've found is that this will led to poor performance due to trend following reasons. when btc is over the 50SMA is probably a bull market and you should buy more not less.

what is in your opinion the best DCA strategy based on historical data?
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joniboini
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November 09, 2020, 01:31:06 PM
 #2

I'd rather make it simple by buying $100 worth of Bitcoin regardless of the price for let's say, every month or so. This will be a conservative portfolio (which also depends on your bag) where you don't really need to monitor the chart when you decided to buy it. Just buy and hold for years.

Here's a website to calculate your strategy: https://dcabtc.com/. If you do the strategy I mentioned above and start buying it from February 2018 you'll be up by 48% as of now.

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drlukacs
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November 09, 2020, 06:20:19 PM
 #3

The price of BTC above the 50 SMA is not necessarily an uptrend yet. It depends on the time frame you choose and needs to consider the nearest trendline to identify in the short / long term trend.
To talk about DCA, you should not consider too much about Technical Analysis as that is Holder's story. DCA belongs to the pricing strategy that you plan to buy when the price goes up or down. So the best strategy here is to depend on your FA analysis skills. A vision and a pre-set plan will determine the success of your DCA. Smiley

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