DCA (Dollar Cost Averaging)
If you’re looking for a crypto trading strategy that doesn’t involve indicators, then dollar cost averaging (DCA) might interest you. DCA is a popular strategy for both beginner traders and experts alike.
Instead of investing all your money into a specific asset at once, you divide your investments into smaller amounts. These amounts are then spread out over a predetermined timeline and are regularly invested on a particular time and day of the week – and only on that day and time.
What does this look like in execution? Let’s say you decide you’d like to invest in bitcoin. You’ve set aside CHF 15,000 for this purpose, and decide a DCA strategy will be the best way forward. So, you’d then divide your initial amount by the number of weeks you’d like the strategy to run for.
For the purpose of this example, we’ll say that you’d like to invest your CHF 15,000 over six months. You’d then divide the initial amount by 24 (the number of weeks in six months), giving you CHF 625 per week. For the next six months, every Tuesday at 2pm you invest your CHF 625 into bitcoin – until your initial amount is depleted.
Why invest like this? Buying an asset in regular intervals helps alleviate the impact of market volatility, meaning you’ll typically receive more of the currency from your final investment than if you’d invested all your money at once.
It’s important to note, to fully make use of this strategy you’d need to trade the specific coin through an exchange – and not through a broker like us.
