The way he divides the buying on dips is not necessarily lump sum investing, so guys here like to mix categories and say that lump sum investing is going on because a large amount might be invested on the dip, and I consider that to be sloppy thinking that fails to recognize and appreciate the difference in the categories.. even though some times the categories can seem like they overlap, but they likely can still be considered in their separate conceptual frameworks in order to make decisions based on the different kinds of trade-offs that might exist based on how a guy might choose to invest any sum of money that he has coming in.
I'm quite new here and I'm still doing some reading through, so I think from what you have just explained a lump sum is not every big money we throw into bitcoin, like in the case you used where the guy had a new amount of 6k and if he had decided to invest all right away that would have been a lump sum cause he made his purchase once and with a huge amount and if he maybe dividend it into three parts equal or not and invested them on intervals that would be a DCA buying Which I had understood from your recent comments on the board.
I was mostly attempting to give the example of a guy buying on the dip and then calling that lump sum, and that is the part that mixes the categories because why is there a need to call it lump sum if it is buying the dip? Lump sum seems to be figuring out what to do with an amount that you have right now, and if you decide to buy the dip with part of it, then so be it, but if you decide to buy right now then why would that not be lump sum.
Sir my question is if a person can make lump sum with a small amount,
I doubt that the amount is really very important, but there is a bit of an assumption that Lump sum would be outside of your regular abilities to buy, so if you have a income of $3k per month and expenses of $2k per month, then you have $1k per month of discretionary income, and perhaps you DCA with part or all of that.
I would think that lump sum would need to be at least higher than discretionary income.. but there could be an amount of money that comes in extra from time to time, and there could be employees who sometimes will receive a once or twice a year bonus, and if they know about it, then they might already spend it before they get it.. or if they sometimes are not sure if they are going to get it, then once they get it, then all of that money might end up considered to be a lump sum, since it is kind of extra.. and maybe the bonus is $2k or $3k.. and then at that point there could be considerations about how much to invest into bitcoin and then if so how much to lump sum (buy right away), DCA and allocate towards buying on dips.
like I've read about how we can mix our strategies to have a maximum effect on our accumulation, like when we set aside some amount to buy on dips and this money is not up to 1k or maybe equal with the allocation you normally give to DCA , would I still call it a lump sum buying.
You can call it whatever you like, but I am not going to call buying on dip lump sum since in my mind those are different categories, even though I can see how people might convolute them merely because they are choosing to buy extra on the dips that are higher than their regular DCA.. but I still think that fails to recognize and appreciate the concept of the lump sum that buys right now.
I already gave the example in my earlier post of a guy who had suddenly received $6k, and I think that I explained that sufficiently well, but let me mix it up a little bit.
Let's say that the person is absolutely brand new to bitcoin, and he knows that he can invest $100 per week for the next 6 months from his salary (his discretionary income / his cashflow), and so that would be $2,600 that he is already planning to invest into bitcoin. And so then he has $6k also that he can move from some other investment or maybe it is an extra amount that was in his cash reserves.., so with that $6k and the $2,600, that means that he has a total of $8,600 that he could invest over the next 6 months. He can divide it however he likes, except $2,600 is currently not available because that is going to be flowing to him in the next 6 months at a rate of $100 per week. So he could lump sum invest anywhere between $0 and $6k, but then if he puts the whole $6k into the investment, then he has no money for buying on dips - except for the $100 per week that he expects to come in for the next 6 months, and that is a choice that he could change if he thinks that it would be good to set a bit aside for possibly buying on dips.. beyond the mere $100 per week that he has.
He could invest $4k right away and then just save $2k for buying on dips.. and instead of having 1 or 2 buys at some various price points, he could instead have 20 buy orders of $100 each all the way down to $40k.. and maybe they are $1,200 apart with the first one being at $63k and the next one at $61.8k and the next one at $60.6k and then next one at $59.4k etc etc etc... or he could have 4 buy orders of $500 each at various points on the way down.. so then he runs the risk that the buy on dip orders will not fill... so there is no guarantee that any of them will fill and that is the trade off that he has to make when he chooses the difference between how much he is going to buy right now with his lump sum amount or how much he is going to allocate for buying on the dips versus DCA.. and maybe he just wants to add to his DCAs and so that is another way of dealing with the extra money that he has available and either of those cases in which he holds back lump sum buying right now, are preparing him for down but they do not prepare him as much for up, and those are trade offs that guys have to consider and decide, since more down might not happen from here... but then if down does happen, does the guy want to have more funds than his DCA amount or is he o.k. with taking his chances and just lump summing all or most of the amount that he has available right at or around current prices. and there is no exact correct answer except that the guy should consider each of the three categories when it comes to funds that he has available to him..
Even with the regular cash coming in, the guy does not have to DCA right away with it, he can hold back some or all of it for buying on dips, or maybe having options to later lump sum the saved up amount if dips may or may not end up coming.
Yeah but when did you start? You have ONLY been registered on the forum for less than a year.
I invested $100 before registering on this forum. $100 is a big amount for me, $100 is more than ৳10000 in local currency of our country. I have learned a lot since I registered in this forum. I didn't know what the DCA method was before. I came to know about DCA method from this forum and started investing in DCA method. The amount of bitcoins I have accumulated now, I would not have been able to invest together. But after investing in DCA method I became successful. My plan is to continue investing in the DCA approach for the long term.
You make my point then.. because maybe you feel good because largely over the last year (and even over the last 16 months) the BTC price has been going up, so maybe you would not have had appreciated the DCA approach if the BTC price had gone down during the period that you have been buying BTC.
I think that you are way too new to DCA in order to consider it a resounding success, even though maybe it is the best that you have available, and so if you plan to continue to buy BTC for a whole cycle that would be interesting to hear.. or if you are not even able to make it through a whole cycle because you are mostly just planning to sell... so yeah. .it is hard to really consider that you really understand and appreciate the power of DCA until maybe you get through a whole BTC cycle.. and yeah, that's my perspective.. and surely you have to consider for yourself if you want to continue with it or if there might be some other kind of an approach that you plan to take over the coming 3-ish years, if you are even able to last that long in terms of your bitcoin journey.