Dollar Cost Averaging: As a Savior
Dollar Cost Averaging is one of the simplest ways to overcome short term fluctuations in the cryptocurrency market. It can have a big positive impact when it comes to creating a profit. In simple terms it means purchasing in chunks at different prices to reduce loss provability caused by price fluctuations by reducing per coin purchase price.
How I used it?
Few weeks ago, I purchased DigiByte at 170 satoshis per unit, but right after I purchased it went to 150, I purchased again, but it didn't stopped going down. I purchased again on 130. For the same amount of BTC (e.g. .0005) I got more coins. For the above prices I got 294, 333, 385 respectively, in total I have got 1011 DigiByte coins and spent 0.015 BTC or 1,500,000 Satoshis. So, per DigiByte my purchase price comes down to 148.36.
So, if the price of DigiByte gone to 150+ Satoshis, which it did, I was at a gain. This is how I turned my 170 sats/coin price to 149 sats/coin, cut down costs and made a good room for large profit.
Hope it helps new traders! Good luck.
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good article - DCA is a great tool to use in investing. Dollar cost averaging work really well with crypto too because the commissions are so cheap - one thing to worry about normal purchase of stocks is that the fees to make trades can be prohibitive and cut into your profits - cryto fees are so low - you can make many transactions without having much effect on your return.
Yes, I am using it almost always in this ups and downs.