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Originally posted on lifestylemaniacs.com
I am not a professional trader, not a billionaire, nor a financial expert. I am just a regular guy who made a lot of mistakes and lost tons of money
I like to experiment a lot in life and try everything, so I am privileged to say I have some experience in what not to do
I have been experimenting with cryptocurrencies, the stock market, commodities, and forex since 2018 when the crypto crash hit me like a wrecking ball. Afterward, leverage trading on the other assets hit me like an asteroid.
Human beings and animals learn through pain, and that’s a fact. It is because our brain learns faster through emotional impact, be it positive or negative.
Thus, is it not enough for someone to tell us not to do something. Until that person feels it on her own, she won’t trust the advice. However, it is my responsibility to share my experience, so take everything with a grain of salt.
You can read my trading and investing mistakes
I tried to create trading algorithms and software to automate the process. I tried to analyze patterns and backtest every strategy. On paper, everything looked beyond my wildest dreams
You can see some of my backtested strategies
However, when I started applying the strategies, something went wrong. I started losing money, not making money. I was so confused and disappointed. I thought I was not patient enough or too diversified. It may be true.
Even with the emotional factor outside the game, it still didn’t work. Then I realized I must stop overcalculating and overanalyzing and keep it simple.
Dollar-Cost Averaging (DCA)
DCA is an investing strategy the implies buying an asset at regular intervals. Be it daily, weekly, bi-weekly, monthly, or even yearly.
Between these intervals, I found that monthly buying is the most profitable in the long run. You can use which one you please.
By using DCA in the long run, you buy an asset at its average price
Of course, a more profitable strategy is to buy and hold in the inception, but not everyone has a lot of capital at hand and spots opportunities. It is also riskier because you don’t know how it plays in the long run.
The main idea is you can’t time the market. Also, watching charts every day or every hour is time-consuming and makes you emotional and prone to bad decisions.
Wise people have used DCA for decades and always one. You can substitute DCA with accumulation. You want to accumulate more assets over time.
There is a caveat; you need to be at least 75% certain the asset will grow over time. You can’t DCA Shiba Ina or other meme coin or meme stock. Thus, you need to invest some time in the beginning to find a relatively safe asset.
I choose to invest in Bitcoin, Ethereum, S&P 500, Nasdaq 100, Gold, and Silver. It’s my choice. I am not recommending, just sharing.
Let’s see some examples of DCA profits in time.
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Disclaimer: I am not a financial adviser and don’t recommend investing in anything as nothing is guaranteed. Everything I write on the topic is for informational and educational purposes only. Always do your research.
