In a bearish cycle DCA will become useless

[Yamane_Keto]

Looking at historical data over a medium-term period, the DCA strategy often yields weak results. The main problem lies in the difficulty of predicting price direction and whether it will rise or fall. This is where DCA comes in, as it's a simple strategy that delivers effective results without any prior knowledge.

[Awaklara]

Of course, traders are still at a loss in the short term. Most people use DCA for long-term accumulation. Its application for short-term holding is, of course, risky. But with DCA, you might see a reduction in the risk of losses that occur, compared to having to use the same amount of money to enter at the start. Even if in the end you have to change the plan from short-term holding to long-term.

[henmark]

DCA is for the retailers and only effective in the long term, should be at least a complete cycle or more to get effective results.

It must be those big guys are the ones who are mainly investing for the long-term, and the small one or the retailers are usually lacking in patience, so they can also sell early. In fact, a lot of big guys are already doing a DCA. Have you heard about Michael Saylor or his company Micro Strategy that keeps on accumulating BTC, even if the value of it is still okay or not really dipped?

I am not fan of DCAing either, on some days, you will feel great but on some days it feels like you are wasting the potential capital by just letting it idle and even continue doing it, knowing the bearish season is here to stay.

This is what I am talking about earlier, about patience. But this is also because we are too small to not have enough money, to not think about our investment for a while. But if you think it is a waste idling it in BTC, then what do you think is much better to do instead? To just idle the money as is, in a fiat form? We don't know that it had a draw back too. The value of it can decay though overtime. So we didn't really save a lot the moment we now use them for buying, when the dip finally arrived.

But one who got no knowledge or any trading skills and has the dream of accumulating a decent amount of bitcoin after 5 years of investment then this is one of the best methods.

Identifying a dip is even simple. But if we set a time frame, then we usually do our best too to maximize the results. Though no doubt, 5 years was still a long time. So if we also don't expect too much, and then as long as we are DCA'ing on the recommended level per month, then we still can accumulate a nice amount of BTC.

[Powerjumboo]

I will try to practice here regarding DCA which is talked about a lot by people, because to be honest I myself am not interested in doing DCA regularly. Here's the picture: If for example, someone buys regularly every month for DCA purposes, I take the price rate below randomly per month:

• $125,000 October - Buy $1000
• $98,800 November - DCA $1000
• $84,000 December - DCA $1000
• $88,500 January - DCA $1000
• $60,000 February - DCA $1000
• $65,000 March - DCA $1000
• $67,600 April - DCA $1000
• $82,500 May - DCA $1000

I have calculated that the average price you will get is $83,800, with a total capital of $8000 and for 8 months.

Even until now the price has not reached the average price of $83,800, instead it tends to fall at the current $78,245. That means this person is still in a floating minus position for 8 months.

However, with the same capital and the same time, if you have good trading knowledge, the capital should be able to double. Unless you really can't trade, that's how it happens.

To be successful in investing, you definitely need time, you cannot be successful in this short time. DCA method is not a bad method for investment. DCA method is a good method for investment. For those who cannot afford to invest at once, the DCA method is very effective for those who invest regularly with weekly or monthly money, but it definitely requires a long time. I would say that instead of 8 months, it should be 8 years if necessary. Moreover, trading is not for everyone. It is very difficult to earn money from trading. Especially for beginners, trading is very risky because trading without experience can lead to losses at any time.

[goldkingcoiner]

I will try to practice here regarding DCA which is talked about a lot by people, because to be honest I myself am not interested in doing DCA regularly. Here's the picture: If for example, someone buys regularly every month for DCA purposes, I take the price rate below randomly per month:

• $125,000 October - Buy $1000
• $98,800 November - DCA $1000
• $84,000 December - DCA $1000
• $88,500 January - DCA $1000
• $60,000 February - DCA $1000
• $65,000 March - DCA $1000
• $67,600 April - DCA $1000
• $82,500 May - DCA $1000

I have calculated that the average price you will get is $83,800, with a total capital of $8000 and for 8 months.

Even until now the price has not reached the average price of $83,800, instead it tends to fall at the current $78,245. That means this person is still in a floating minus position for 8 months.

However, with the same capital and the same time, if you have good trading knowledge, the capital should be able to double. Unless you really can't trade, that's how it happens.

You are equating apples with oranges, it would seem.

Either you DCA or you trade. Comparing both makes no sense. One is a division of risk the other is, depending on the trading skills of the person, either pure gambling or a steady time intensive side job which may or may not pan out to a loss, a zero sum waste of time or a slight profit which would still be under the DCA profit, at the moment the price goes above the 83k you mentioned.

So the question is are you a good enough trader to make a higher profit than waiting for the floating position to get into the green again? For 99% of people, the answer is obvious. DCA is better.

Personally, I think I could make a profit higher than DCA but not high enough to justify the amount of time I would have to put into TA/FA. I could use that time to earn money in a different way.

[Luke3bird]

You are equating apples with oranges, it would seem.

Either you DCA or you trade. Comparing both makes no sense. One is a division of risk the other is, depending on the trading skills of the person, either pure gambling or a steady time intensive side job which may or may not pan out to a loss, a zero sum waste of time or a slight profit which would still be under the DCA profit, at the moment the price goes above the 83k you mentioned.

So the question is are you a good enough trader to make a higher profit than waiting for the floating position to get into the green again? For 99% of people, the answer is obvious. DCA is better.

Personally, I think I could make a profit higher than DCA but not high enough to justify the amount of time I would have to put into TA/FA. I could use that time to earn money in a different way.

Most traders don't prepare their finance well so they borrow money for trading, or they have own money for trading but later using leverages for their trading positions. This way of trading with leverages makes their trading more risky, and harder to control their emotion, psychology, decisions, and actions.

There are traders who use DCA strategy too but it's only usable if traders only trade with Spot. If they use leverages, trade with either margin or futures, doing DCA will make their trading positions likely not better but actually worse, with increasing risk after each DCA.

With investors, surely DCA is a very good tool and by investing with own money, they even can hold their portfolios without further DCA while of course it's helpful for their Bitcoin portfolio building if they can maintain DCA with time.

[yhiaali3]

Theoretically you are right, at the current price the person who followed DCA over eight months in your example would come out a loser at the current price of $78,245 for Bitcoin, but in reality you do not have to sell now, you can simply wait until the price of Bitcoin reaches $120k or more and you will come out with a large profit.

DCA strategy does not force you to sell at a specific time or price. It is based on accumulation and on the price rising in the long term. There is no specific time or price. The important thing is to be patient, even if it takes years, and you will come out a winner.

[Wind_FURY]

After reading some of the posts in the topic, let's ask OP,

- Did you actually use the DCA accumulation method and thought that your Bitcoin portfolio will be in profit in a short amount of time?

 ¯\_(ツ)_/¯

You probably need to have some friction between you and your Bitcoin now because you might be tempted to sell under your average entry price if another crash happens soon.

[Merit.s]

However, with the same capital and the same time, if you have good trading knowledge, the capital should be able to double. Unless you really can't trade, that's how it happens.

It's not to come here and say things that you haven't practiced and succeed. It's easy to make profits from trading with mere talks than putting it into practice. I want to ask the OP, if what he said is what he's doing if not, don't come up with such idea because you want to mislead newbies that they can trade instead of investing in the long term.

From your above calculation on DCA, it doesn't work that way because you are a long-term holder and not a short term. Those that DCA are only accumulating bitcoin for long term and not because of quick profits. In every circle bitcoin price reaches a new ATH that's enough to let you know that in the long run DCA will put you in a better profit. Trading will put you at loss because even professional traders run at loss. Long-term investment is far better than trading.

[Free Market Capitalist]

You are equating apples with oranges, it would seem.

Either you DCA or you trade. Comparing both makes no sense.

I don't think it is comparing apples to oranges. He is trying to see which method is more profitable and both are ways to make money. But I think you've got a point here:

So the question is are you a good enough trader to make a higher profit than waiting for the floating position to get into the green again? For 99% of people, the answer is obvious. DCA is better.

Well, it seems the OP thinks he is, but for most people, DCA beats trading. The point is that DCA only works with assets that go up in price over extended periods of time. During shorter sideways or bearish periods, traders who can accurately predict the market's direction (a small percentage) will be more profitable.

[Peanutswar]

I've been doing a DCA since the market crash of the bitcoin roughly around early February and AFAIK I remembered I bought around 60-66kish price of the bitcoin that time so right now I'm still continuously doing a DCA strategy so until when?, I guess for the whole year and then wait for the next cycle of the bitcoin once potentially touches again the 100k price. Not only bitcoin of course when the market goes up the alts follows so I guess i will accumulated too with the top 10 coins at the CMC. Ideally its good to make a DCA with a technical analysis support.

[Big Dirams]

After reading some of the posts in the topic, let's ask OP,

- Did you actually use the DCA accumulation method and thought that your Bitcoin portfolio will be in profit in a short amount of time?

 ¯\_(ツ)_/¯

You probably need to have some friction between you and your Bitcoin now because you might be tempted to sell under your average entry price if another crash happens soon.

And don’t know how many people sees DCA or treat DCA but with such strategy when been apply to our investments journey then such investors should understands that he or she is aiming for future goals and nothing more than that. Because if we have the mindset to keep accumulating bitcoin with DCA method over either weekly, monthly then we are hoping to keep buying and buying so selling off shouldn’t be what we see as a way to exit and even the market volatility shouldn’t get us bothered at all

[Ishicryptic]

You need to be an exceptionally good trader to say that trading is better than DCA strategy to accumulate Bitcoin for investment purposes because I know that trading is very risky and only a few traders that are always profitable the rest are losing on the long run. Except that you're sure of making guaranteed profit in trading that is the only place that I can agree that it is better than Bitcoin specifically for you. For the rest of us Bitcoin investment through DCA strategy is our safe haven for a far lesser risk venture. When Bitcoin dip is the best time to buy as much fun as you can because it has proven that it has the potentials to reach ATH and give you profit on the long term.

[cryptoaddictchie]

However, with the same capital and the same time, if you have good trading knowledge, the capital should be able to double. Unless you really can't trade, that's how it happens.

As an active altcoin degen and defi user. Id say not only double could be triple and more. But the safest move there is btc this will ve a good dca even at loss since bitcoin can rally and recovered overtime. But if this was used for farming defi airdrops Im not surr could have made more especially if the projects are hype and aligned to narrative. Trader can lose this wholly if not careful.

[EarnOnVictor]

-snip-
Even until now the price has not reached the average price of $83,800, instead it tends to fall at the current $78,245. That means this person is still in a floating minus position for 8 months.

I've indicated this on the forum many times that DCA investment strategy, despite good, has its limitations. Although some people would argue blindly, here comes another constructive prove to buttress it.

Many people are engaging in many strategies in Bitcoin and get away with it not because the strategy is cool and void of imperfection, but because they are practicing it on Bitcoin which will eventually edge back higher over time. The DCA strategy, or any investment strategy, for that matter, have never been proven good for a long-term bearish market. Although the DCA strategy, if favours you, could limit the pain by averaging risks, because what you bought at $125,000 has been lessened in risk when you buy another at $80,000 or so.

[tvplus006]

...I have calculated that the average price you will get is $83,800, with a total capital of $8000 and for 8 months.
Even until now the price has not reached the average price of $83,800, instead it tends to fall at the current $78,245. That means this person is still in a floating minus position for 8 months.

The DCA strategy will work correctly for longer periods of time, which are calculated in years rather than 8 months. Your failed experiment is due to the fact that the starting point of the DCA application coincides with the historical maximum of the BTC price. Try to calculate what your average BTC price would be if you started using DCA in November 2022, when the price of bitcoin was about $15,000.

[slaman29]

8 months? DCA isn't meant for 8 months It's meant for long-term. I always write that whenever I mention it, I'm sure others do too.

That is how average works. The more the sample the better the average as an indication. Anyone who says DCA with Bitcoin and doesn't think in terms of ATH to ATH cycle isn't getting the full benefit of DCA

Investment is long term, DCA is a strategy for long term investment but it's not wrong to consider people who patiently accumulated bitcoin for 8 months are not like investors, and what they did is not DCA.

Yes and I'm not like trying to look down on them either I'm just trying to be practical and explain it straight, that this simply isn't how DCA works, its literaly in the name. Dollar Cost Average. And anyone who studied basic mathematics in school must ask the first question about 'average' and that is, what's the sample look like?

8 months is not a good sample for this strategy considering Bitcoin cycle is about 4 years.

[tbct_mt2]

Both of them are investments but they should be patient because of which they will get profit. If we invest in Bitcoin with DCA, we can gradually see the price and take profit, but to invest all at once, we have to do a good analysis, only then we can buy good Bitcoin at a low price and for that we have to wait a long time, then only we will get profit. Those who have waited so long may have to wait even longer because the price of Bitcoin is not very happy, so it will take a long time. The investor will have to be more patient and think so that after waiting so long, if they definitely get profit.

Investment is truly very long term, and if you want to invest with all money at only one purchase, you must do research about Bitcoin, and believe about its long term future, so that with your entry price (only one entry), you will not mind with any short term loss as you plan for very long term holding. It's truly hard and not many investors practice like this while most people who use all money for purchasing bitcoin with one action likely panic sell later.

Long term investors with DCA strategy are more well prepared for their investment, and with time and DCA practice, their understanding about Bitcoin, the market will increase, while their psychology will become better, so that they don't panic sell.

After reading some of the posts in the topic, let's ask OP,

- Did you actually use the DCA accumulation method and thought that your Bitcoin portfolio will be in profit in a short amount of time?

 ¯\_(ツ)_/¯

You probably need to have some friction between you and your Bitcoin now because you might be tempted to sell under your average entry price if another crash happens soon.

DCA is a good strategy but this strategy is for long term, not short term, so it's a wrong application of DCA strategy if someone wants to get profit in short term with this strategy practice.

Sometimes, with a good DCA purchase, and the market recovers after that, you can have very quick profit but it's not the main purpose of DCA strategy, and it does not mean with other DCA purchase times, quick profit will come again.