5 ms·

How do you DCA?

by sdan 7y ago

How do you DCA?

cwkoss 7y ago
Pick a dollar amount and (buy|sell) that amount of Bitcoin every week on the same day at same time. By making a 'dumb' plan, you remove the enticement to try and time the market. Perhaps even more than wall street markets, it's hard to day trade Bitcoin successfully: most of the advice you'll read is by people who are either lying, exaggerating or got lucky. The major issue is that there is a TON of non-public information that is much more relevant to price levels than publicly available information. Many smart players who are using 'insider info' will be able to eat your lunch. I fully expect that someone has a very accurate model of the quantity of deposits at some exchanges via address linking, and is watching inflows and outflows carefully. I also expect employees of Bitcoin exchanges are passing data to trader friends. Knowing when a big chunk of Bitcoin is about to be tradable on an exchange is a great sell indicator, and USD a great buy indicator.
krallja 7y ago
// parameters: $520 to invest over 1 year for(i=1; i<=52; i++) { buy(10 usd); sleep(1 week); }
- sdan 7y ago
  Yeah I know how DCA works. Just wondering on what platform you're doing it on.
  - snodnipper 7y ago
    You can do that on Coinbase. There is a blog post here https://blog.coinbase.com/easier-recurring-buys-and-sells-on-coinbase-9a3cd7ea934e https://blog.coinbase.com/easier-recurring-buys-and-sells-on...
    - sdan 7y ago
      Feel like Coinbase fees are too high... even for Pro
      - chrisco255 7y ago
        You don't have to trade on Coinbase, you could just buy and hold on Coinbase and send it to another exchange if you want to trade.
  - deleted 7y ago
    [deleted]
lavezzi 7y ago
Here you go: https://github.com/brndnmtthws/optimal-buy-cbpro https://github.com/brndnmtthws/optimal-buy-cbpro
- sdan 7y ago
  Thanks!
hanniabu 7y ago
Coinbase has an auto buy on set interval function.
tunesmith 7y ago
DCA means you invest the money as you get it. It doesn't mean you identify an existing lump sum and invest it slowly over time. Because you only DCA if you think it'll go up over time. Why would you DCA if you think it will go down over time? So if you think it will go up over time, then if you have $x for it right now, put it all in. Don't DCA it because if you believe it will go up over time, then you're just missing out on the gains you believe will be there. If you're convincing yourself that it'll go down in the next 2 months before it goes up the 4 after that, you're just being too clever trying to predict the future. DCA is just about what you do with additional money you get in the future, that you don't have yet. Like, if your DCA money is 0.5% of your yearly revenue, then after each paycheck, put that 0.5% of your paycheck into your investment. That's all it is. The idea is that it is to keep you from forgetting about the market and only investing when everyone's talking about it during the highs.

How do you DCA?

by sdan 7y ago

How do you DCA?

Pick a dollar amount and (buy|sell) that amount of Bitcoin every week on the same day at same time. By making a 'dumb' plan, you remove the enticement to try and time the market. Perhaps even more than wall street markets, it's hard to day trade Bitcoin successfully: most of the advice you'll read is by people who are either lying, exaggerating or got lucky. The major issue is that there is a TON of non-public information that is much more relevant to price levels than publicly available information. Many smart players who are using 'insider info' will be able to eat your lunch. I fully expect that someone has a very accurate model of the quantity of deposits at some exchanges via address linking, and is watching inflows and outflows carefully. I also expect employees of Bitcoin exchanges are passing data to trader friends. Knowing when a big chunk of Bitcoin is about to be tradable on an exchange is a great sell indicator, and USD a great buy indicator.

krallja 7y ago

// parameters: $520 to invest over 1 year for(i=1; i<=52; i++) { buy(10 usd); sleep(1 week); }

sdan 7y ago
Yeah I know how DCA works. Just wondering on what platform you're doing it on.
- snodnipper 7y ago
  You can do that on Coinbase. There is a blog post here https://blog.coinbase.com/easier-recurring-buys-and-sells-on-coinbase-9a3cd7ea934e https://blog.coinbase.com/easier-recurring-buys-and-sells-on...
  - sdan 7y ago
    Feel like Coinbase fees are too high... even for Pro
    - chrisco255 7y ago
      You don't have to trade on Coinbase, you could just buy and hold on Coinbase and send it to another exchange if you want to trade.
- deleted 7y ago
  [deleted]

lavezzi 7y ago

Here you go: https://github.com/brndnmtthws/optimal-buy-cbpro https://github.com/brndnmtthws/optimal-buy-cbpro

sdan 7y ago
Thanks!

hanniabu 7y ago

Coinbase has an auto buy on set interval function.

tunesmith 7y ago

DCA means you invest the money as you get it. It doesn't mean you identify an existing lump sum and invest it slowly over time. Because you only DCA if you think it'll go up over time. Why would you DCA if you think it will go down over time? So if you think it will go up over time, then if you have $x for it right now, put it all in. Don't DCA it because if you believe it will go up over time, then you're just missing out on the gains you believe will be there. If you're convincing yourself that it'll go down in the next 2 months before it goes up the 4 after that, you're just being too clever trying to predict the future. DCA is just about what you do with additional money you get in the future, that you don't have yet. Like, if your DCA money is 0.5% of your yearly revenue, then after each paycheck, put that 0.5% of your paycheck into your investment. That's all it is. The idea is that it is to keep you from forgetting about the market and only investing when everyone's talking about it during the highs.