[Steem Talk] Brainless investment

So here we go, hitting the big way of bull! Shall we buy?

Seriously, it looks really tempting. Most if not all of us will be having the adrenaline rush looking at this kind of spike graph.

Sadly, as and when we decided to hit the little green button to fire up purchase order, and this happen. Half the people will start shouting in front of their screen.

Source from Pixabay

So when is the good time to buy? How do we know whether it's a good time to buy? Well, luckily we know Steem. And in Steem, we trust. Anytime is a good time to buy Steem! All we need to figure out is, our threshold. How much do we want to buy and invest for our future.

Let's take a look at this graph I captured from @coingecko. We can always use the grid line on the graph, as a reference to buy on a dip. But how so? Well, in crypto world, every crypto is actually working as a commodity(I know digital assets is the term). So, dollar value will always be a spot price to execute a trade. Which means, if we buy at lower price, it's always become a limit order.

This graph for example, a day ago it was 0.42. What happen here is, if we buy with the sequence of 0.01 interval.

Buy $10 at 0.41 = 24.390steem
Buy $10 at 0.40 = 25.000steem
Buy $10 at 0.39 = 25.641steem
Buy $10 at 0.38 = 26.316steem

On overall, we purchased $40 worth of steem, at the amount of total asset 101.347steem. average price became 0.3947. Which means, market only need to recover half of it, we will be able to recover from loss and be able to start earning again.

Let's talk about total asset hodling. If we were to buy all $40 at the first drop at 0.41, we only get 97.561steems, in turn we lost 3.786 seems just because we did not park the orders.

Why not park it at lower price? Let's do the match again. If we buy all 40$ at 0.36, which will be 111.111steem. We earn less 9.764steem. Wow! Might as well we buy all at 0.36, why bother to scale in on every 0.01 drop?

Once again, this is called brainless trading. Ask youself again, will you buy all when price meet 0.36? Why not 0.35? If fall below 0.35 become 0.32, where are you going to park? 0.30? What if market renounce at 0.31 and never touch 0.30? Come on let's face the reality, even the best technical analysis couldn't tell you where exactly is the market limit. 10 years ago people say bitcoin will explode at $100 value, did they?

I didn't ask anyone to buy with the money they can't lose. I assume the term "investment" has been widely acknowledged. If you have no idea wtf is an investment, please head over to investopedia and use the look up. I'm merely sharing with you how dollar cost averaging can help you make a decision without LOOKING.

We will come back to, method. Stay tune for next Steem talk. Cheers.