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How to Use DCA to Get the Best On-Base Averaging

How to use DCA (Dollar-Cost Averaging) to get the best average entry on assets such as BTC, ETH, MATIC, STEPN, SOL, LUNA, EGLD

A thread on how to use DCA to print millions in crypto and stocks🤝


Buying the bottom is unrealistic, in fact even the best traders will fail to buy the bottom most of the time.

You don't need to snipe the bottom to make money, this is why 👇🏽

1) You buy on trend reversal (read my previous guides)

2) You can DCA at key levels to ensure exposure

What is DCA?

Dollar-cost averaging involves investing percentages of your portfolio at different levels of interest (support) to ensure exposure to the asset and leaving you with dry powder in case the unexpected happens.

DCA is a great technique for new investors because:

1) It gives a psychological buffer 👑

Let's say John waited in USD to buy BTC at 12k but BTC touched 13k and never filled John's bids.

John has no exposure and feels like he missed the boat to a 100,000 BTC.

BTC started bouncing and John FOMOed himself into longing on high leverage since he missed out on his bids.

TLDR: John gets rekt.

This could have been easily avoided if John started DCA'ing into BTC from above 12,000 even with a small percentage of his portfolio.

2) It reduces risk

DCA can greatly reduce risk in case an asset keeps dropping to levels much lower than predicted.

3) It leaves you open for opportunities

Having fresh liquid capital ready to be deployed on the side is number one rule of a good trader. We want to always have dry powder in case a better opportunity pops up, a black swan event happens etc.

How do we DCA?

I will explain you how you can implement DCA combined with Technical Analysis.

Firstly let's mark out key support levels on the asset we are interested in.

(Read my the free guides in my pinned tweet to learn how to find key levels)

In this example I will explain my BTC DCA plan.

I expect BTC to bottom out somewhere between 17,000-11,000 but I'm not sure where

So I make a DCA plan, let's check it out.

Sample DCA plan:

DCA 1: 15% of folio at 17,000 DCA 2: 20% of folio at mid range 14,500 DCA 3: 25%+ of folio at low yearly level 12,000

DCA 4: Rest of portfolio on bullish weekly trend reversal

Our plan ensures that we

a) have liquid capital in case better opportunities on alts pop up

b) we have market exposure and keep our sanity preventing us from FOMOing and doing dumb trades

c) reduces our risk in case BTC goes to 0

Some tips:

• I would recommend using DCA mainly on assets you are bullish on long term (large caps), remember alts have liquidity problems

• Leave capital to DCA on the way/reversal up rather than down

• If you are new: Don't use DCA with leverage, just don't.

This post is based on this twitter thread.


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