Have you heard of DCA or Dollar-Cost Average?
This approach is said to be ideal for beginners, those who want to minimize risk, those with a small tolerance for the market's high volatility, small investors, and long-term investors, like those wishing to have a retirment fund.
What is DCA about?
The idea is for you to invest the same amount of money regularly paced. For example, let´s say to have 50 USD spare cash each month. As soon as you cash your paycheck, you buy 50 USD worth of your crypto of preference. You do that every month.
How does it work?
Easy peasy. Today 1 Solana is worth USD 137. Your 50 USD buy 0.36 Sol.
When you get your paycheck in May, 1 Solana is 250 USD. Your 50 buy 0.2 Sol
In June Solana is 122. You buy 0.40.
By the end of June you have 0.96 Sol bought at an average price of USD 169.
What´s so great about that?, you may ask. After all, if I buy at 122 I would get 1.22 Sol.
You're absolutely right. But, do you know when the price will plumet? Do you know when it is likely to go up? Do you have the time to constantly monitor the market so you don't miss the jackpot? Do you have the time and willingness to read the news constantly to try and anticipate a major change? Would you know how some event might impact the crypto world? Are you willing to spend hours learning how to read candlestick charts? Are you emotionally prepared to see your investment lose a half of its value for weeks at a time? That's what traders and brokers do. They have huge earnings, but huge loses too.
So, you can't anticipate when Sol is going to be 1232and when 250. Imagine you see your favorite crypto going down for hours. You want to buy more, but what is the price you want to pay? 200? Ok, you buy at 200 and then it ends up going down to 122. What if you wait till it gets lower than that, and then rises rapidly to 250 before you can buy? Bitcoin reached 60,000 yesterday and stayed there for less than 2 hours. those things happen.
What Dollar Cost Average does for you is make sure in the long run you are not buying at the highest prices. This approach yields more modest gains in comparison with good trades , though.So it is up to you to decide whether it is for you or not. Do your own research. If you want to read more, this is a good place to start: https://bitpay.com/blog/dollar-cost-averaging-crypto/
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