DCA (Dollar-Cost Averaging) is an investment strategy that involves investing a fixed amount of money in an asset, the idea is to reduce the impact of market volatility and avoid trying to guess the best time to buy.
In other words, it is to buy at different price levels during a sideways or downward trend to ensure that the average cost is lower than it would have been if you had only invested all your capital at a specific moment.
👍 HERE'S AN EXAMPLE WITH WORLDCOIN: 👍
Purchase points:
December 1: Purchase $50 of WLD at $3.40 per WLD (14.71 WLD).
December 9: Purchase $100 of WLD at $2.60 per WLD (38.46 WLD).
December 19: Purchase $250 of WLD at $2.10 per WLD (119.05 WLD).
This leaves us with an average cost of $2.32 which is better than having invested your $400 at a price of $3.40, which is the first point at which we bought WLD.
(Binance calculates your average cost, but if you want to know how to calculate it, let me know in the comments)
In the image, we can see that despite the drop, thanks to a good DCA strategy, we would have profits today.🤑🤑
