Post
Topic
Board Speculation
Re: Buy the DIP, and HODL!
by
Justbillywitt
on 07/04/2024, 09:59:08 UTC
Do you know that what makes most newbies to sell off their Bitcoin investment is a major price decline of bitcoin. For instance if they bought $2k bitcoin at once and when their is a decline in the market and their capital go from that $2k to around $600, this could trigger panic and the thought to salvage what's left. This could have been avoided if they were properly oriented about the DCA method from the beginning and they utilize it. If a newbie invest using the DCA method and there is a decline in the market and his capital didn't record a big decline, I bet you that newbie will not sell off his portfolio. He will see it that his capital is not badly affected.
It would obviously be the case of orientation and not having the clear idea on how these things happen in Bitcoin. Mind you, when there is a decline, it always depends on the position at which the individual had taken a buy and for someone who buys using the DCA strategy, you don’t always get to buy at a low, you could buy at a high price too. It’s always available funds determinant rather than the price on the charts. If this be the case, it’s always very unlikely that your capital wouldn’t be hurt on a decline except, in obvious cases where you’ve already bought a huge volume when the price was low and some worth volume while it was high. The high and low would tend to balance off profit/loss in price differentials.
In many cases you can lose big and gain in market ups and downs it depends on opportunity and timing. Actually you can't buy BTC cheaply even if you want to even though you have keeping DCA strategy enabled. You may not have enough money on hand during the bearish BTC price trend in the middle of the month but you have the potential to buy at the end of the month. One claim of this market trend is to regularize the long-term DCA strategy, because when you buy BTC on a regular basis for a long time on a monthly basis the extra money ends up with household expenses. In 5-10 years you can own a large BTC portfolio and one benefit of keeping DCA strategy in parallel with daily household expenses. Here you should aim to carry out DCA on a regular basis regardless of the prices between months or years, making it much easier to stay free from trading pressure.
The aim of DCA is not buy bitcoin cheaply, rather it is aimed at reducing the impact of market fluctuation on our capital invested. If you are buying through DCA, you will meet the market at different prices, sometimes lower sometimes higher. You are not concerned about bearish trend or bullish trend, you buy at the intervals which you have already programmed yourself. Mind you DCA method doesn't only apply on monthly basis, it can be done weekly, or interval of days as well depending on how you programmed yourself to buy. So don't stick to the idea of monthly alone. There's something I also noticed in your post and like me clear it out, don't ever put the money for your household and investment together, that's not a good idea. You should always separate them from source. Know your percentage for investment before investing.