The strategy that I am describing is pretty damned close to DCA, especially since I was doing it on a weekly basis. Let's say, for example, I had a budget to buy bitcoin of $100 per week, and it was for 26 weeks (which would be $2,600 for 6 months). And if the beginning of the week is Monday and the end of the week is Sunday, maybe I might identify a couple of the dips through the week or maybe I would be waiting for dips that did not end up happening, so by the end of the week (Sunday) I would use either the whole $100 or whatever parts were left to buy at that time.. of course, the beginning of the week could be chosen as any day. and each week there was a new $100 authorized, and let's say that I felt that I did not have time to watch the market, so maybe I would just buy or maybe the price opens at $28,500, and I would set my buy order at $27,820, and if the order did not fill by Saturday, then I would just market buy or maybe set the buy order within $50 of the current price so that I have more confidence that it is going to fill before the end of the week.
Ohh, now I see your point, the strategy you employed is actually DCA, the only difference is the fact that you wait for the dip before accumulating more, its not a bad one but its time consuming as it requires constant watching of the market, so assuming your targeted price is not meet for the week, do you add the amount to that of next week or you'll abandon that weeks accumulation?.
What he meant was that the strategy is similar to DCA not that it is exactly the same thing as DCA. DCA does not really wait for the dips because it is applied irrespective of the price or market condition. The target is to always buy at regular interval. Data presented in the forum by various people who have applied DCA in the past and still applying now shows that even when they put in the same amount of dollars to buy, the quantity of Bitcoin varies because of the price difference.
If I remember correctly, the discussion in this thread actually differentiated between buying in the dips and applying DCA. Both have their pros and cons and serve different purposes.
- The method you're talking about is using small weekly savings to buy Bitcoin. But I'm wondering, what if you have a substantial amount you intend to invest in Crypto, let's say $100,000? How would you use DCA in that case?
- For me, my approach is to divide my capital into three parts. Every time Bitcoin corrects more than 20%, I put in one part of the capital. From the beginning of the year until now, I've only executed one of these parts. The other two parts are still waiting for the next correction cycles.
If you have the time and discipline to follow this like you planned, I don't see nothing wrong with it. But for me, instead of dividing into three parts, I would have done it in such a way that a lot of those funds would have already entered the market before we get to the end of the year because it is possible that price might leave you behind since we have several good news coming. This year presented us several opportunities to buy and very cheap price so waiting further seems like a sign of doubt or fear and if price goes higher than it is now, you might miss the opportunity to buy low.