Post
Topic
Board Economics
Merits 1 from 1 user
Re: What are some financial secrets that you know of?
by
Nwada001
on 30/07/2023, 15:59:19 UTC
⭐ Merited by JayJuanGee (1)
An example of what I mean is that, let's say you have up to $8k and you wish to buy Bitcoin with all that Capital, but you keep accumulating weekly with $200 and you believe that Bitcoin can go down to $25k, but instead of the $25k, it falls to $22k. At that point, instead of still continuing with the DCA, you can just use all (or 90%) your remaining capital to buy up Bitcoin at that price because, as you can't tell, the market can also take a big spike from the low price that it fell to and jump to a high price. Perhaps the market is always volatile.

I agree with what you said and the example that you have given, but using the price difference in your example is not enough to abandon DCA, as there is not much of a difference between $22,000 and $25,000. If one has a reserve of about $8,000 just for the accumulation of bitcoin and believes the all-time low during that season could be $25,000 but it dropped below that and went down to $22k, which appears to be an added advantage to the accumulator, which is true, but moving forward to accumulate with up to 90% of the reserve funds to me is not a good move, as the same possibility that makes the price drop down to that low level can also repeat itself and it could go down more a bit. I know there is also a possibility of prices going up during that season, but let us always consider both sides while our calculations and our buying decisions should be based on reality.

Instead of using 90% of the reserve funds in a case like this, I will calculate to use up to 3 weeks funds, which could have been $600-800, adding to the present week's own and making my purchase while also observing the market and using my DCA strategy. So that whatever the market turns out to be, there will always be funds to accumulate. Remember that the purpose is not to get a quick profit but to see how much could possibly be accumulated with the fund at hand.