Dollar-cost averaging
2. Dollar-cost averaging
DCA may sound complicated at first, but actually it is quite simple. It is a variation of hodling, that mitigates against some of the risks we discussed in the previous section. The goal with dollar-cost averaging, is to make regular investments of the same amount at repeated intervals. Regardless of the day-to-day price, giving you an average overrule price.
To give you an example, let us just say you make a plan to buy $50 each month from the first day of the month, and stick to that no matter what happens to the price, it does not matter if the date that you choose falls on a weekend or a bank holiday, because unlike the stock market, crypto markets are open 24/7. This strategy hedges against major market movements and takes a long-term position over several months or even years, thereby helping you to avoid mistiming the market. And it is arguably one of the best strategies available.
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