DOLLAR COST AVERAGING
DCA stands for "Dollar-Cost Averaging," which is an investment strategy used to reduce the impact of volatility when purchasing assets, such as stocks, crypto, or other securities, over an extended period of time.
Here's how DCA works:
1. Regular Investments: Instead of making a large lump-sum investment all at once, DCA involves spreading your investment across smaller, regular intervals.
2. Buying at Various Price Points
3. Risk Reduction
For example, let's say you want to invest $1,000 in a cryptocurrency. Instead of investing the entire amount at once, you could use DCA to invest $100 every week for ten weeks. This way, you'll purchase the cryptocurrency at different price levels, potentially reducing the impact of price volatility.
