After reading and disagreeing with a recent post Be Careful - DCA is NOT a Sound Strategy In Most Crypto Cases , and even beeing challenged to give arguments i decided to make my own post.
You need to be smart enough to know you're not that smart. You will not predict the next bear market, nor how long it will last the next cycle, much less will you be able to do it consistently for years or even decades. And even if you have excellent technical analysis along with a great ability to understand and predict the world's political and economic landscape, all the time and energy you will spend probably won't be worth it ( at least for 99% of people) that's a lot of if's to try to outperform a well-tested strategy.
If DCA is an excellent strategy to invest in stocks, for the same reasons it will also be in crypto. I would say even better because one of the biggest difficulties of investing in crypto is maintaining emotional control in such a volatile market, what better way is there to fight FOMO or PANIC SELLING than a rule/strategy that gives guarantees? These are feelings that cannot be ignored, waiting months or even years for the market to go down or up in order to act is something that very few have the stomach for.
The biggest weakness turns out to be also a positive point of the DCA, because you have no option, if you want to do Dollar-cost average you have to choose good projects, the timings are almost irrelevant but studying the projects in depth is mandatory, this makes you a better investor, it is more efficient to invest the time to understand and get to know the technologies and thus choose the winning projects than to try to predict different market factors.
We all know that not even Benjamin Cowen can get enough predictions right to justify all the effort he put into his strategy. Everyone is trying to get the timing right, most people who say they do DCA don't have the discipline to do it consistently, DCA is like dieting, it's not hard to choose chicken and rice instead of pizza, it's hard to do it with consistency.
TLDR Dollar-cost averaging is a good strategy for investors with lower risk tolerance or limited time/resources because the risk of failing the market timing`s can put you in a unsettling position and unable to think clearly, it`s the best way to mitigate risk
[link] [comments]
You can get bonuses upto $100 FREE BONUS when you:
π° Install these recommended apps:
π² SocialGood - 100% Crypto Back on Everyday Shopping
π² xPortal - The DeFi For The Next Billion
π² CryptoTab Browser - Lightweight, fast, and ready to mine!
π° Register on these recommended exchanges:
π‘ Binanceπ‘ Bitfinexπ‘ Bitmartπ‘ Bittrexπ‘ Bitget
π‘ CoinExπ‘ Crypto.comπ‘ Gate.ioπ‘ Huobiπ‘ Kucoin.
Comments