Guide
Dollar-Cost Averaging (DCA): Spreading Out Your Timing
Bottom line: buy a fixed amount, regularly
Dollar-cost averaging (DCA) means buying a fixed amount on a regular schedule, regardless of price. You automatically buy less when prices are high and more when they're low, smoothing your average entry price.
Key takeaways
DCA spreads out your timing, suits beginners, and removes the pressure of "timing the market". It is not a guarantee of profit.
Why it helps
| When | What happens |
|---|---|
| Price is high | You buy a smaller amount |
| Price is low | You buy a larger amount |
This pairs well with crypto's high volatility.
Pros and cautions
- Pros: no need to time the market; easy to keep up; less emotional
- Cautions: a steady decline still loses money; not a guaranteed profit; watch fees
Make it automatic
Many exchanges offer automatic recurring buys. Keep the amount comfortable and stick with it.
Sources
- Investopedia — DCA: https://www.investopedia.com/terms/d/dollarcostaveraging.asp
Not financial advice
This article is for information only and is not investment advice. Crypto assets are volatile and carry risks including hacking. Do your own research and only use money you can afford to lose.
This article is informational only and is not financial, investment, or trading advice. Prices are reference snapshots and may be outdated. Always do your own research.
