DCA- an acronym for Dollar Cost Averaging is an investment strategy that functions on the principle of averaging the cost of purchases bought over a period of time so as to get a good entry or a good averaged price. Averaging cost can be achieved by investing a fixed dollar amount at a selected time frame; for example, a $10,000 investment each month could be split into $2,500 weekly. (So a particular amount and time-frame is set)
The basic effect DCA makes possible is being able to take advantage of the volatility in the market buying low quantity of an asset when the price is relatively high, and buying more of the same asset when the price goes lower with the same stipulated dollar amount.
This strategy helps the Crypto investor to acquire more units of an asset owing to the fact that the strategy obeys the ultimate Crypto rule to buy the dips. This practice in effect reduces investment risk exposure, balances market volatility effect, reduces the average cost of the assets when compared to amount per unit, it also averages entry price and ladders into positions.
To better explain how using Auto-Invest to DCA gives more gains than just a onetime investment purchase; let’s X-ray a case study using the $2,500 weekly scenario:
continue reading here at Publish0x. Search the topic in the image.
Follow for more insightful info...
