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From my understanding of what DCA is about. You have explained what it means but the major challenge of DCA's investment strategy is constantly regurgitating the investment which I believe is the reason why JayJuanGee brought up the idea of analyzing the plug-in numbers to see how it plays out.
Yes, DCA is the method that is understood and used by Bitcoiners, not rich/naive folks who join the market due to the advantage presented by Bitcoin.
DCA requires you to constantly have a budget in your pocket to purchase and purchase within the time period you determine. Not everyone is suited to this strategy - but you can get around this by not using 100% of your budget on your first purchase. Set aside a few percentages into several parts – for example 25% of each purchase, that is also referred to as DCA. If you have an extra budget each month - it's probably safe for you to spend 100% of that budget on each purchase and you'll do DCA again next month. In essence, DCA is an adjustment by dividing several parts of your capital instead of buying all at once with 100% of the capital.
Yes, the DCA strategy is an investment that involves constant accumulation of Bitcoin but you seem to miss some point and the route that entails using DCA.
I said this because DCA was a method that helps Bitcoiners maintain their expense, financial responsibility, and savings while they still invest in BTC.
An example some people are paid weekly. Such a person will calculate his/her expenses before the next pay with the portion of the wage he/she can use to accumulate BTC weekly, or monthly.
From my understanding of what DCA is about. You have explained what it means but the major challenge of DCA's investment strategy is constantly regurgitating the investment which I believe is the reason why JayJuanGee brought up the idea of analyzing the plug-in numbers to see how it plays out.
Yes, DCA is the method that is understood and used by Bitcoiners, not rich/naive folks who join the market due to the advantage presented by Bitcoin.
If we are looking back at history, and we have actual numbers because we know enough about a person's situation, then we would have the actual numbers that we could plug in and also see the variations in amount invested or other factual matters with a potential of making actual comparisons and based on actual hypothetical facts, even though we might end up guessing if we are trying to proclaim a person might invest based on sentiment rather than investing strictly based on how much disposable income he had coming in (for example calculating the disposable income for each wee and then presuming 50% had been used to buy bitcoin as compared with some other scenario).
Many times when we are arguing on a forum like this we don't necessarily have enough information to plug in actual details, so we might just end up giving some general number like $100 per week for the past 8 years and then plugging that into a DCA calculator, and frequently that can be good enough to compare DCA versus lump summing at various points.
If we are trying to project into the future, then we still might get some kind of an idea about how much income we have and we can project out various price scenarios for the BTC price, so we could see a base case scenario as compared to best case scenario, worse case scenario and likely variations of the scenarios, and we could get some pretty decent ideas, even though for sure we are not going to know all of the details and if we were going to attempt to maintain such future projection, we likely would have to tweak our future projection from time to time to account for actual facts or changes to circumstances that would likely change the future scenarios.
I think that an Excel spreadsheet can be quite powerful to make make future projections, including once we make our base case scenario, then we can copy paste a lot of the variables into new columns in order to create a variety of scenarios, and we can build on our variables and also save our earlier versions. It can be quite helpful to assist us in working through various scenarios and even to figure out which portions we can control and which portions are out of our control, yet we can still attempt to account for the knowns and the unknowns, including using probability and percentages and even incorporate some of our theories of the world, to the extent that we believe that our theories could impact the variables of the scenarios.
You have pointed out almost all the reasons behind what makes it hard for people total survive with the use of DCA but I believe it will be nice to be flexible when using the method DCA and adding the concept of using an Excel spreadsheet to keep the record of the process to have full understanding of the future projections.