𝑾𝒉𝒚 𝑫𝑪𝑨 𝑺𝒉𝒐𝒖𝒍𝒅 𝑶𝒏𝒍𝒚 𝑩𝒆 𝑼𝒔𝒆𝒅 𝒐𝒏 𝑩𝒖𝒚 𝑻𝒓𝒂𝒅𝒆𝒔 – 𝑵𝒐𝒕 𝑺𝒆𝒍𝒍; 𝑻𝒉𝒆 𝒔𝒕𝒓𝒂𝒕𝒆𝒈𝒚 𝑰 𝒖𝒔𝒆 𝒑𝒆𝒓𝒔𝒐𝒏𝒂𝒍𝒍𝒚❗️❗️

In trading, many fall into the trap of using Dollar Cost Averaging (DCA) on sell (short) positions. The problem lies in the unlimited risk of short trades. For example, if you short a token at $10 and it rallies to $20 or higher, your losses multiply fast. Averaging into that position only deepens the risk, and even a minor pullback won’t recover a significant portion of the loss. The position remains heavily in drawdown, and the trade becomes increasingly difficult to manage or exit.

In contrast, applying DCA to a buy position offers a clear recovery path. If you buy a token at $10 and it drops to $1, you’re down 90%, but averaging in at lower prices lets you accumulate more tokens for the same cost. This drastically reduces your average entry price, meaning a modest price recovery can bring you much closer to breakeven—or even into profit. The fixed downside makes buy-side DCA a far more manageable and controlled strategy.

That’s why, even when I expect a market drop, I prefer setting a long position rather than going short. A buy-side trade gives flexibility and the ability to restructure or recover using DCA. On the other hand, sell trades have unlimited upside exposure, making recovery through DCA impractical and risky.

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