Investing in crypto assets is not far from the risk of volatility and price fluctuations. So, is there a way to reduce risk so that profits are maximized? Well, there is one investment strategy, namely Dollar-Cost Averaging (DCA), which means investing in installments regularly and consistently according to a predetermined time period.
Why DCA Strategy?
It is through this DCA strategy that we can make decisions based on our own research without having FOMO. The way it works is also quite easy and very suitable for you beginner investors who don't understand technical analysis.
There are three things that need to be considered when carrying out a DCA strategy
1. Set a purchase date every week or month.
2. Prepare the funds to be spent.
3. Routine and consistent.
For example, we have determined that every 5th of every month to invest $100 in BNB coins, then we must consistently buy BNB coins according to the date and time period that we have determined.
Because this DCA strategy is usually used for long-term investments. So we no longer need to pay attention to market movements. But you could lose the opportunity to make big profits compared to using a lump sum or one-time purchase strategy.
Advantages of the DCA strategy
- Helps minimize risks arising from market conditions
- More efficient to control emotions when seeing price fluctuations.
- Helps your habit of consistently investing.