Introduction
I’m in the big mood. 🎶
You fit dey reason say “wetin dey shack this guy?” My dearest comrades, na una dey gimme joy. I wan say “thank you” for the ginger wey una dey give me. WAGMI.
E get one day wey me and one of my guys dey talk about 2020 wey be COVID year, I come follow am joke about how many people just pour money inside BTC come dey expect something hooge like investor Sabinus but when dem wake up like 2 days later come check their wallet, e come be like say the market don chop their money leave tithe for dem to manage. I know say many people don loose money for this crypto market.
Na why I wan yarn about another investment strategy today.
DCA na for people wey dey like me wey wan invest in crypto but no fit do active trading as per say those yeye green and red charts dey make me feel like say my brain wan shut down and no get liver lose money anyhow. E get reason why the chart dey look like heartbeat wey dem display on top monitor.
This shit is detrimental to my body and my soul🎶
Wetin Be Dollar-Cost Averaging
Make I just sharparly blow small grammar.
DCA is an investment strategy that aims to reduce the impact of volatility on the purchase of assets. It involves buying equal fiat amounts of the asset at regular intervals.
I know say I talk “small”, no vex.
Wetin all the grammar wey I yarn now mean? First of all, i don talk say na investment strategy. Na the kind strategy wey you fit use balance yourself when any assets wey you guy (crypto for this case) begin to dey go up and down anyhow.
Normally, if you wan buy crypto, you fit just drop all the money once but for DCA, you go dey buy am in installments. No worry I go still explain.
Why you go wan use DCA?
The time wey BTC first drop from $60K enter $50k, many people go see am as opportunity invest hopping say e go go back to $60K but BTC carry them goal-goal, e enter the $40K zone, some still believe say e go move back up again but BTC talk say “ e never do”, e come fall enter the $20K zone wey e dey now dey try gather ginger.
When people dey trade, to dey correctly time market dey part of the hardest things to do. Make we assume say you divide the money wey you wan use enter market into like 4 parts come reason say you go invest one part every month (e fit be weekly, daily, biweekly sef, na you go decide), for our BTC example, you go see say e dey more likely say you go gather more BTC than if you go drop all the money at once.
Wetin DCA dey try do na to try help you better manage the up and downs of the market, e no completely make you “trenchesproof” my dear comrade.
How DCA dey work?
Before anything you go wan sabi how much money you wan put down and the cryptocurrency wey you invest in.
Make we assume say you don find one coin wey enter your eye and the price na #100,000 for 1 but na #50,000 you get wey you fit invest. You fit drop am once buy 0.5 of that coin but for this DCA matter, you come talk say you go divide that #50,000 into 5 parts and you go dey invest every week.
For the first week, you drop #10,000 so you come by 0.1 of the coin, when come look am the next week you see say the price don come down to #50,000, you still put your urgent #10,000, now you come buy 0.2 of the coin, making your total 0.3 abi.
The following week, the price don move up enter #65,000, e mean say you go fit buy about 0.15 of the coin, now total don enter 0.45. The fourth week, the price still boost enter #85,000, so na around 0.12 coins you see buy. The last week, the price slide down to #70,000 meaning say na around 0.14 coins you see buy.
At last, after you use DCA, you con get 0.66 of that coin wey enter your eye. Make we come assume say you hold for another one month, the price con trabaye enter #200,000 per coin. The person wey no do DCA get #100,000 but you wey do DCA go get #132,000.
come help my career comrade 🥺
The comma wey DCA get
The comma wey DCA get na say e no go pay you for sustained bull trend. Wetin “sustained bull trend” mean be say the price of a cryptocurrency just dey go up over a long period of time. The opposite na wetin dem dey call bear trend
So now you see say e go pay to put all the money in when e be like say the asset wey you wan invest in wan dey gather ginger but the wahala na say how you go sabi when the bull trend wan start, you no be Dr Strange my comrade.
Conclusion
DCA just wan try make sure say even if crypto dey carry you go trenches, maybe you go stop for the gate make e no go carry you go where you no know.
If you no fit sit down dey actively look for signal and co and you like peace of mind, you fit try am out. E go pain you if you lose guard on the big cashout but e better pass the pain of waking up to 10% of your investment. If you be long term investor, you fit use DCA make you dey consistent.
If this piece wey I write sweet your belle or you get questions abeg make I know, you fit tag me on top the bird app @OfficiallyXenos na my name.
If you think say e worth am, una fit share am amongst una people.