This theory is the correct way to buy digital currencies and its explanation is to buy in parts so that you can make price averages for the purchase price and always be in profit!!!
Buying in chunks or gradual splitting is a smart way to manage risk when investing in cryptocurrencies. Also known as Dollar Cost Averaging (DCA), this method reduces the impact of market volatility on your investment. Here’s an explanation of the method and how to apply it correctly:
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The concept of purchasing in parts
1. Capital division:
Instead of investing your entire capital in one trade, divide it into equal parts.
Example: You have $1,000; divide it into 4 or 5 parts, and invest one part at a time.
2. Choosing the timing:
Buy at regular intervals (e.g. weekly or monthly), regardless of the currency price.
Or, buy when the price drops by a certain percentage (for example, whenever the price drops by 5% or 10%).
3. Average price:
When you buy currency at different prices, you will have a relatively low average purchase price.
If the price rises above this average, you will be in profit.
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Advantages of this method
1. Reduce risks:
Reduce the impact of large market fluctuations.
2. Better psychological management:
Avoid worrying about timing the market precisely.
3. Maximizing profits:
Possibility of making profits even in a volatile market.
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Important tips
1. Choose currencies carefully:
Focus on coins with strong projects like BNB, ETH, BTC.
2. Set a fixed budget:
Don't invest more than you can afford to lose.
3. Use exit plans:
Set profit targets and stop loss limits, which we will explain later.
4. Follow the market:
Although you should follow moving averages to know the market direction, you should also follow the news and technical indicators. This will help you improve the timing of your purchases.
5- Do not buy with all your balance in a new currency when it is starting to rise. Buy in parts.
This way, you will be able to make stable profits and improve your investment strategy in the cryptocurrency market.
Good luck
