How DCA Could Have Prevented Your from Losing More

[roadrunnerjaiv2025]

Dollar-Cost Averaging (DCA) is a classic investment strategy in which you divide up the total amount you'd like to invest in a particular asset across periodic purchases. You don't care if the price goes up or down; you just buy at regular intervals.

Let's say you have $10,000 you'd like to invest in BTC. Instead of making one lump-sum investment, you spread your purchases across a certain period, say 10 months. This means that every month you will buy $1000 worth of BTC regardless of the price.

What does this do?

1. It helps reduce the impact of volatility (because you won't get tempted to invest more than $10,000 when you see dips). In other words, you avoid the risk of making counter-productive decisions out of fear or greed, such as panic-buying or panic-selling.

2. You may not notice it from your short-term investment activity, but if you zoom out and look at the big picture, you'll see that you have more exposure to dips when you dollar-cost average than when you track for a dip.

3. Let's face it, tracking for a dip is time-consuming and stressful. You could use the time you spend poring over news and charts to manage your other income sources.

However, this strategy only works if the price is generally going up. Like any other strategy, it won't work in a bearish market that has no hope of breaking out.

But at least this way:

1. Your total loss will be smaller.

2. You only lose a portion of the fund you initially intended to invest because you didn't add more in the process.

3. Recovering your losses is also easier if the market is bound to recover.

4. The amount you intended to invest is most likely just a portion of your wealth you can afford to lose, which means you can also afford to wait it out until the market recovers (and not resort to capitulation).

This could have saved or eased the suffering of those who lost their entire life savings on assets that crashed in the recent bear.

[mk4]

Unfortunately while DCA being one of the most effective strategies for non market pros, it's probably the most boring method hence why most people don't want to do it. People get really addicted to the adrenaline rush of getting in and out of positions, not knowing that most of them are just basically gambling because they're doing things blindly.

https://dcabtc.com/

[cabron]

It helps reduce the impact of volatility

This volatility is something of investors must not be concern upon investing in BTC since the market will always do what it do. The volume is always high when it comes to BTC market. What investors concern is to make a profit every time. He will need to hold for a very long time if he starts DCAing while the price has not yet bottomed. That's an option for the investor.

While you are not yet losing money because of DCAing, just find the right time to buy. So far we still could see people telling us its not yet the bottom price.

[roadrunnerjaiv2025]

Unfortunately while DCA being one of the most effective strategies for non market pros, it's probably the most boring method hence why most people don't want to do it. People get really addicted to the adrenaline rush of getting in and out of positions, not knowing that most of them are just basically gambling because they're doing things blindly.

https://dcabtc.com/

Couldn't agree more. But it's also a fact that DCA is for position traders (those who prefer long positions). Definitely not for scalpers, day traders, and swing traders. But ultimately, it's not the technique that would cause you to lose more but taking risks you can't manage and spending more than you can afford. 

[Wexnident]

It's probably one of the safest methods in investing (in terms of being taken by your impulsive actions) as well as avoiding most of the decision-making due to market conditions. It's basically an investing strategy for someone who doesn't have the time to trade or for someone who doesn't want the stress of trading, just as OP said. It's not exactly something newbie traders would go for though at the start, I myself have lost quite a substantial amount first before even trying it out.

[Fortify]

Dollar-Cost Averaging (DCA) is a classic investment strategy in which you divide up the total amount you'd like to invest in a particular asset across periodic purchases. You don't care if the price goes up or down; you just buy at regular intervals.

Let's say you have $10,000 you'd like to invest in BTC. Instead of making one lump-sum investment, you spread your purchases across a certain period, say 10 months. This means that every month you will buy $1000 worth of BTC regardless of the price.

What does this do?

1. It helps reduce the impact of volatility (because you won't get tempted to invest more than $10,000 when you see dips). In other words, you avoid the risk of making counter-productive decisions out of fear or greed, such as panic-buying or panic-selling.

2. You may not notice it from your short-term investment activity, but if you zoom out and look at the big picture, you'll see that you have more exposure to dips when you dollar-cost average than when you track for a dip.

3. Let's face it, tracking for a dip is time-consuming and stressful. You could use the time you spend poring over news and charts to manage your other income sources.

However, this strategy only works if the price is generally going up. Like any other strategy, it won't work in a bearish market that has no hope of breaking out.

But at least this way:

1. Your total loss will be smaller.

2. You only lose a portion of the fund you initially intended to invest because you didn't add more in the process.

3. Recovering your losses is also easier if the market is bound to recover.

4. The amount you intended to invest is most likely just a portion of your wealth you can afford to lose, which means you can also afford to wait it out until the market recovers (and not resort to capitulation).

This could have saved or eased the suffering of those who lost their entire life savings on assets that crashed in the recent bear.

DCA is generally discussed about the stock market and is often the only strategy available to people - adding a set amount every month as they get paid their salary. It helps capture the troughs of the market and also the peaks, which ends up with the best average returns you're likely to get. However it does not really apply to Bitcoin, which is an idle and non-productive asset class. Sure you might have made money from DCA on the way up, but at its current hefty price that could go up or down, you're unlikely to make anything like the fairly stable returns of the stock market. If you're trying to "recover losses" then you're already in a failing position and many people simply don't have the long term commitment that real investing requires.

[livingfree]

Been doing this and I can say that it's been effective to me.

As long as I'm in profit, I can dispose and sell some portion at my own will if I need to do so. I've told this strategy to my friends but yeah, it's really boring upon knowing what to do.

It's a strategy for the patient and enthusiasts in the market without thinking of selling as soon as possible. This is the understanding of the investors that does this, they're all long term.

[Coyster]

This is the understanding of the investors that does this, they're all long term.

Yes, since the investor would be investing over a certain (long) period of time, they obviously should have the intention of hodling whatever asset it is for the long term. Short term investors are all about going in all at once with a large sum and hope for a pump around that time so they could pull out with their profit, that is a very risky strategy, especially for newcomers who are just investing in an asset for the first time. If one is patient enough, and is ready to stick to their DCA plan religiously, then they would prolly be able to grow something really worthwhile in the long run, without really stressing their finances in the short period, which is the best part of it all.

[palle11]

This is an accumulation investment that gradually builds your money but it is just like any other investment apart from real online trading. It also has its emotional disadvantage when there is a huge bear you might want to be tempted to invest when it is not your stipulated time to push in money, that is the emotion playing fast on your mind. It may also be liking to other businesses because even in physical business arrangement, your investment grows as you increase your capital. It is different from online trading anyway.

[hatshepsut93]

DCA is goot if you  are doing it in a bear market, since you will have more coins than buying coins with all your money at the start of bear market, but it's also worse than buying coins with all your money at the bottom of the bear market and then waiting for a new bull market. 

I would say that it's better to buy a large sum and wait for many years - you are only losing money if you are selling coins at a loss, not if the price drops below your entry point. But if DCA helps you sleep better, than go ahead.

[LogitechMouse]

Been doing this for quite some time already.
I've been doing it not only in crypto, but also in the stock market, and it's so far the best strategy for me.

The only downside that I'm seeing with this is that your potential profit will be smaller, especially when the market is going up since you are buying as the market is going higher but aside from that, I think there isn't any problem with it and for me, it's safer than just buying a single crypto or stock at once (lump sum). It's kinda boring in a way since many people right now wants instant gratification already, but DCA is working especially if you are young.

[PrivacyG]

DCA is goot if you  are doing it in a bear market, since you will have more coins than buying coins with all your money at the start of bear market, but it's also worse than buying coins with all your money at the bottom of the bear market and then waiting for a new bull market. 

I would say that it's better to buy a large sum and wait for many years - you are only losing money if you are selling coins at a loss, not if the price drops below your entry point. But if DCA helps you sleep better, than go ahead.

I disagree.  DCA works even during bull runs.  You increase your average cost, but your average cost will not be the All Time High unlike many investors who got screwed temporarily in 2017 by investing at around All Time High price.

It works during any run, whether bull or bear.  I have DCA'd before myself and it works wonders.  Bearish?  You get more Bitcoin.  Bullish?  You get less Bitcoin but the purchases you made during bear runs are now compensating.

On the other hand, I tried purchasing a large sum and waiting for many years.  Since you mostly hear about assets when they either crash to the underground (LUNA) or when they pump crazily (SHIB), you get to want to buy only during hype and sell only during extreme FUD.  For the average investor it is very hard to pick the right choices at the right time.  Therefore, by DCA'ing, you make sure you buy any time no matter the market conditions.

DCA'ing an asset brutally crashing is also so much more helpful than purchasing a big chunk of coins at once.  Your average gets significantly lower and the coin needs to heal much less before you are starting to earn a profit than it would need to heal if you had purchased a big chunk at the higher highs.

Of course.  Not financial advice.  This is my personal experience.

-
Regards,
PrivacyG

[kryptqnick]

I haven't heard of this strategy, I believe, but I fail to grasp how this is better than other things. It's kind of time diversification, but it still depends on a year when you do it. If it's a bull market that's going on for months, the price is growing, and you keep pouring a thousand after a thousand into Bitcoin. Then the price, say, starts going down, and you're still doing it. Why isn't it better to wait till the price is quite down (say, at least -30% from the ATH), and invest $10k then? It would mean buying more BTC than if a person buys when the price is high.

[mk4]

Couldn't agree more. But it's also a fact that DCA is for position traders (those who prefer long positions). Definitely not for scalpers, day traders, and swing traders. But ultimately, it's not the technique that would cause you to lose more but taking risks you can't manage and spending more than you can afford. 

Well yea, DCA is for long-term investing and was never meant for trading in the first place. Not to mistaken DCA from doing TWAP (time-weighted average price).

[palle11]

DCA is goot if you  are doing it in a bear market,

Yeah and that helps for larger accumulation.

I haven't heard of this strategy, I believe, but I fail to grasp how this is better than other things. It's kind of time diversification, but it still depends on a year when you do it. If it's a bull market that's going on for months, the price is growing, and you keep pouring a thousand after a thousand into Bitcoin. Then the price, say, starts going down, and you're still doing it. Why isn't it better to wait till the price is quite down (say, at least -30% from the ATH), and invest $10k then? It would mean buying more BTC than if a person buys when the price is high.

Like the above such kind of investment is profitable when you buy cheap and that is during the bear as we are witnessing in the market as for now. If you put money in a bullish season you of course get lesser quantity of bitcoin. I think is a better strategy for hodling bitcoin from the bear to bull, a longtime plan.

[Hamphser]

I haven't heard of this strategy, I believe, but I fail to grasp how this is better than other things. It's kind of time diversification, but it still depends on a year when you do it. If it's a bull market that's going on for months, the price is growing, and you keep pouring a thousand after a thousand into Bitcoin. Then the price, say, starts going down, and you're still doing it. Why isn't it better to wait till the price is quite down (say, at least -30% from the ATH), and invest $10k then? It would mean buying more BTC than if a person buys when the price is high.

Better on the sense on catching/patching up your losses specially if you do make yourself bought on the peak and since you are gradually buying on cheaper price after your entry point then you are really that

closing that gap but DCA isnt something that a relevant thing to be done if you do really go for long term target or goal because you can really able to bare in speaking with volatility.

DCA is a good strategy but this is something that not fits all yet this would surely involved a bigger investment or finances or money on your pocket in doing so. 

[livingfree]

This is the understanding of the investors that does this, they're all long term.

Yes, since the investor would be investing over a certain (long) period of time, they obviously should have the intention of hodling whatever asset it is for the long term. Short term investors are all about going in all at once with a large sum and hope for a pump around that time so they could pull out with their profit, that is a very risky strategy, especially for newcomers who are just investing in an asset for the first time. If one is patient enough, and is ready to stick to their DCA plan religiously, then they would prolly be able to grow something really worthwhile in the long run, without really stressing their finances in the short period, which is the best part of it all.

I've tried to be that one for short term but it doesn't work perfectly for me. I make money from trading short term but unlike the others that I've seen.

They're making huge money after pulling it off in the market even it's just for the short term. I admire them for having that effective strategy in the short term.

But, I know what works for me better and that's holding for long term and if I've got some spare money, I'll do DCA.

[Darker45]

This could have saved or eased the suffering of those who lost their entire life savings on assets that crashed in the recent bear.

I agree. And make no mistake, DCA is a great investment approach people could adopt. It is recommended. However, this won't really pacify those who have panicked and those who have fallen to their fear and eventually decided to sell what they have. In other words, this only applies to those who know what they are into. To those who do not, the various kinds of investment approach do not matter, especially when faced with a severe bear market.

So what will really ease their suffering and save them from making worse decisions is education and awareness.

[The Sceptical Chymist]

Unfortunately while DCA being one of the most effective strategies for non market pros, it's probably the most boring method hence why most people don't want to do it. People get really addicted to the adrenaline rush of getting in and out of positions, not knowing that most of them are just basically gambling because they're doing things blindly.

I'm gonna go old school and just say word up to that, buddy.  I've never looked into the advantages of DCA investing, but I've done it with retirement accounts in the past where money was taken out of my paycheck every week. 

For the crypto market, though?  I don't think a lot of folks on this forum do it, either because they don't have the discipline or simply don't have enough money on a regular basis to plow into bitcoin or whatever altcoin they're into.  I mean just take a look at all the obviously desperate bounty hunters there are, working for shitty tokens that might be worth nothing (assuming they even receive them at the end of the bounty period).  I have a feeling they're trying to earn crypto to buy basic need items and probably aren't building a crypto stash.

With respect to this most recent crash, I'd point out that dollar-cost-averaging would only protect you if your average purchase price was less than $30k or so, and it won't always prevent you from "losing more".  You can actually lose everything depending on what you're investing in.

[South Park]

Unfortunately while DCA being one of the most effective strategies for non market pros, it's probably the most boring method hence why most people don't want to do it. People get really addicted to the adrenaline rush of getting in and out of positions, not knowing that most of them are just basically gambling because they're doing things blindly.

https://dcabtc.com/

This is true and DCA is only working in theory without consideration of the psychological effect of FOMO on the human mind. I'm guilty on this DCA shit or whatever and I always wrecking my plan whenever there's strong price movement in the market. For example is when I saw a red candle in a short time frame while monitoring my holdings, I can't stop buying more even though it's not yet on my schedule and it continues until I spend all my money buying even if the price is not yet stopping to dip ergo I always stuck without buying power for the lower price level.

That is what makes those strategies so hard to implement, the psychological aspect is often overlooked when people are learning how to trade, however it is a critical aspect, if you cannot master your emotions then you are bound to not follow the strategy that you have set for yourself and make costly mistakes from which it is really difficult to recover, also DCA is a strategy that does not react to the markets and instead makes you to invest in them at fixed intervals, which runs contrary to what most people are used to do in the markets.