DCA In, DCA Out, and Taking Profit?

[Davidvictorson]

On the one hand, dollar-cost averaging (DCA) in the context of cryptocurrency, specifically bitcoin, is an investment strategy for investing in bitcoin in order to cushion the effects of the price volatility that it has been known for. The investor sets aside money to buy bitcoin in chunks at regular intervals. An advantage of this strategy is that one can comfortably invest in bitcoin at anytime, either in a bull or bear season. On the other hand, taking profit in the context of cryptocurrency, specifically bitcoin, is when an investor sells a bitcoin in an effort to lock in gains after a period of appreciation.

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?

Thank you.

[SquirrelJulietGarden]

DCA is for actual long term investors and they do both accumulation and profit taking gradually with a very long time.

As investors, they must take profit but if you are a smart investor, you will take profit gradually and partially. A first time you take profit should be a time you do it to retrieve your initial capital. After that first profit taking, your investment position is totally safe. Then for the rest part, you can split it to different parts and consider for profit taking in future.

Because Bitcoin has its bull run with 4 year halving cycle so your profit taking strategy should be span out with 4 year period or 5 years. Same if you already take profit all Bitcoin you have and want to accumulate it again, you should proceed it in 2 to 3 years.

[Poker Player]

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.

[Crypt0Gore]

DCA have been very helpful for me so far, my tokens amount keeps increasing since last June 2022 when BTC dumped to 17500$ since then I am used to taking profits and wait for some dump to buy back and wait for some recoveries and do the same thing over and over, with patience DCA can grow your crypto bag better.

[sunsilk]

I haven't heard the term of DCA out but let's just take it that it has got the same meaning from its root. But whoever said that, we can say that it's all about taking profit and it can be the opposite of the actual DCA for investing.

Like every time that the price of bitcoin or any coin that you hold and you consider it as a good time to sell then, you'll sell at any price range as if you're DCAing oppositely.

But regardless of it, we should balance our strategy. As we DCA, we also have to take profits when it's considered good to take some and don't miss that time.

[jackg]

A lot of people take money out of investments when they have to pay for things and can't use other money or don't want to - a very abstract example but it's the same here imo.

If you put a certain amount in every month over say 5 years and then withdraw a certain amount every month after that, past price movements would show you'd have made money doing that. It much better to dca than it is to pick a sell all price or date target as that just might not work out (like all the people on about $300k) or if it hits that price and you think it'll go higher only to watch it do the opposite.

It might also be worth dcaing out if you have made good profits on crypto and don't want to completely leave it, if you invested $200 over 12 months and hold it for a few years and then see it's gone up to $24000 but know there's a better, more stable investment elsewhere and you want to preserve your interest you could then withdraw $1800 over the next 12 months to leave your capital in crypto but invest a lump sum in another market that might be more stable/diversified (like stocks).

[landheer]

DCA is for actual long term investors and they do both accumulation and profit taking gradually with a very long time.

As investors, they must take profit but if you are a smart investor, you will take profit gradually and partially. A first time you take profit should be a time you do it to retrieve your initial capital. After that first profit taking, your investment position is totally safe. Then for the rest part, you can split it to different parts and consider for profit taking in future.

Because Bitcoin has its bull run with 4 year halving cycle so your profit taking strategy should be span out with 4 year period or 5 years. Same if you already take profit all Bitcoin you have and want to accumulate it again, you should proceed it in 2 to 3 years.

yes, I agree with your opinion, indeed with such a strategy we will control the profits obtained, and if there are losses, of course there will not be too much loss because we buy them with a gradual strategy or DCA system. and I also often use the DCA technique, in buying and selling.

[tabas]

yes, I agree with your opinion, indeed with such a strategy we will control the profits obtained, and if there are losses, of course there will not be too much loss because we buy them with a gradual strategy or DCA system. and I also often use the DCA technique, in buying and selling.

That sounds like it is what OP is asking, DCA out is the version of selling. But anyway, what a coincidence as I've discussed two topics about learning the lesson of DCA. It's not directly telling about DCA but the logic if it if you've been doing this strategy will make you realize the significance of it. So, if you've got spare time, you can check these topics.

• A painter received $50 worth of bitcoin on June 2013.
• Throwback: Bitcoin was $64k today, a year ago.