Hi guys, I'm reading your posts for a while already, and I just registered myself in order to ask an easy question for you. I don't want to disturb you if it's a typical one but, I didn't read it here in this topic, which is the only one I'm following.
What is your practical strategy to DCA? I mean, what platforms do you use? Are you using exchanges? Are you using the Ledger purchasing options to buy? Are you using private P2P transactions? Where?
Thank you in advance.
You have to consider what might be available to you and the area in which you live. Many guys are using various kinds of exchanges to get their BTC, and some of them might allow for automatic DCA, and in others you might have to carry out your DCA manually. I prefer manually doing my buys, even though I would usually use limited buy orders rather than market orders, even though in the last 8 years or so, I am not DCAing as much as I had done in times before that.
Surely, if you are able to get bitcoin in peer to peer transaction directly from someone then that might be better in terms of privacy and control over the coins, even though the fees are probably going to be higher when you directly interact with someone and they might have even minimum amounts that you have to buy or availability issues. There may be some guys who buy through Bitcoin ATMs, yet some times those Bitcoin ATMs will have quite high fees, also depending on the company and the area you are in.
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If someone divides his discretionary income into two parts, maybe some days there may be some financial crisis in his investment. Because he has to bear personal expenses. If he divides his discretionary income into two parts as you said, one for an emergency fund and the other for investment. In such a situation, if you do not keep some amount of money with you to bear your personal expenses. If you need some amount of money for any need, you may be forced to sell the investment or take money from your emergency fund.
You can invest with the amount of money that you think you do not need after excluding all the weekly or monthly related expenses. And what if you have $ 10 left after excluding all your expenses, you can also buy using the DCA method. And along with the investment, you should create an emergency fund. So that you can be able to face unexpected financial disasters.
Your discretionary income is the amount of money that you have available after you have already accounted for your expenses... so if all that you have is $10 left, and if you don't have an emergency fund, then you might have to build your emergency fund at the same time that you are buying bitcoin. Surely $10 is not very much to work with so it might not be practical to attempt to buy those low of amounts of bitcoin, depending on how you might be sourcing your bitcoin.
Even though theoretically it makes sense to divide the $10 into $5 for each (your bitcoin and your emergency fund), yet practically, it may make more sense to build up your funds to a certain amount before buying bitcoin, depending on various fees that might apply and/or other transaction costs.
Of course, some guys might have some variation in which some weeks they might have zero or even less income than expenses, and then other weeks might be normal amounts of discretionary income , such as $10, and then maybe other weeks they might have more, such as up to $100.
Dip is setting up nicely , so get ready for it.
soon to go under 80k
Prepare extra money to buy during the Dip because it's now.
It seems that the bearmarket will come sooner than expected bullrun --- but in this dip we will own more BTC as the price continues to fall.
Just don't panic if you're an investor - it's time to buy more.
In a situation like this, I think it would be better if we combine several purchase methods at once, such as DCA and Lump sum. Because of course it would be a shame if when the bitcoin price is sluggish, we don't buy much. But of course, to use the multiple purchase strategy, we need more cold money. So maybe if you have a small cold fund, I think you should still do DCA, because don't push yourself too hard (like borrowing money). But for investors who have quite a lot of cold funds, I think now is the time to buy bitcoin to the maximum. Because that way, you will definitely get a little more bitcoin. And you are right at this time the bitcoin price is down like it is now, bitcoin investors should never panic at all. Because times like this are a golden opportunity for us to increase our bitcoin portfolio so that it is more. So stay enthusiastic to continue buying and HODLing bitcoin.
If this can be considered as a dip, then we can combine buying the dip, DCA and lump sum purchase in our investment plans, this depends on whether we can afford it financially, anyone with reserved fund can pour it into his bitcoin investment also and accumulate at a much higher speed than usual, investors shouldn't feel discouraged buy the current price shift, its a temporary correction and bitcoin will hit a new ATH to the shock of everyone bad mouthing it right now.
I personally do not recommend using reserve funds to invest in bitcoin. Because in my opinion reserve funds are not cold money, because as far as I know reserve funds are used when there is an urgent need, so using them to invest in bitcoin in my opinion is not the right thing to do. Because we invest in bitcoin for a fairly long period of time, so if we also include reserve funds in bitcoin investments, what happens if an urgent need comes to us. It is certain that we will most likely sell the bitcoins we have, although it certainly will not be all. But still, it slightly hinders bitcoin investment. So with that, as I said above, if you don't have cold money, then don't force yourself to invest in bitcoin.
Because when you are going to invest, of course you can't just use funds. Because investing certainly struggles with what is called risk and a fairly long time. So it is certain that all funds invested must really be cold money so that our investment in bitcoin runs smoothly. And besides, as you said, this decline is only temporary, and bitcoin will definitely reach a new ATH again. That's why if you don't have cold funds, don't be discouraged because you don't buy now. Because of course bitcoin will continue to experience high price increases.
Largely in this thread, we have been talking about three kinds of back up funds.
1)
emergency funds - try to build them up to 3 months of your expenses (income) and only use for actual emergencies such as loss of income and/or increased expenses
2)
reserve funds - can be used for any kinds of extra expenses or saving up for items, including buying btc dips, if wanted
3)
float funds - from month to month may keep extra funds (cash) in accounts when the exact expenses might not be known. Once expenses are determined then the floats may be converted into reserve funds, which thus come available for spending if so chosen.
You (Tamaperdana) were using the term "reserve fund" as if they were the same as emergency funds, which I think that it is better to categorize emergency funds and reserve funds differently since emergency funds are more restricted than reserve funds..