The systematic investment plan is one of the traditional methods in mutual funds followed by the majority of investors and this is quite successful because people get the opportunity to buy different funds at better-averaging prices. Everyone can't buy assets regularly with the same discipline since we are busy with our lives but following this practice makes it possible since things are executed in auto mode. In the crypto market, the systematic investment plan methodology is called dollar cost averaging which is also known as Dollar Cost Averaging (DCA). This is a very common practice in the crypto market that many people follow because they can buy any coin they like through this method automatically as per the frequency they want.
Using DCA they can buy crypto daily weekly or monthly for any amount and there is an option to customise everything. I like this method of buying Crypto because we just need to manage funds in our wallet and the rest is executed by the platform itself. Many cryptocurrency exchanges are providing this functionality now which I think is good and I expect those who are still not offering should consider the option to be added on their platform because this is going to help people easily buy crypto.
Time for DCA
The right time to go on dollar cost averaging is when the market is down because that can be a good opportunity to bag more coins for the same amount that we invest and I prefer to go on the daily buy. The reason why I believe that the daily buy is good is because the crypto market is volatile and when the market is not on the uptrend then we can expect more price fluctuation. If we go with the daily buy then there is a higher probability that we will get better prices every day so instead of going on a weekly or a different buying frequency it is recommended to go on the daily buy and grab those benefits where the average buying price is going to be much lower.
This time Bitcoin prices are again in the range of 25K US dollars so if you are planning to buy then this can be a good opportunity daily because you never know if it can go even below this range. If the price goes up then it is still better on average but if it goes down then you'll be able to get a much lower price and this is why when the market is not in good sentiment then the dca is the best practice to follow. also when there is a spike in the price then it is the right strategy to put a pause on the buying because no point buying on the higher side however the current price range is not on that level so this should be ongoing.
Long-Term Approach
There are two types of investors, one is the person who trades and tries to make money out of it and the second is the one who buys and holds. I am the second type because I believe trading is highly risky and with a long-term approach, I minimise the risk since whatever I buy will be held for a long time and there is no selling pressure on me since I have enough holding power. this is like once and waiting for the right opportunities to sell and this period can be a couple of years. I have been investing in crypto since 2017 and since then I have followed the same strategy which worked well in my case. I still hold the Bitcoin that I purchased in 2017 and I am in profit but my goal is for the long term and for that reason, I'm not going to sell it for the next few years because I expect that the next bull run cycle is going to be even bigger but yes I also do understand that we cannot predict when is it going to happen.
The similarity strategy I follow with hive is that whatever I have here in my wallet is going to stay here and even I do trade from time to time to grow my liquid holding. I sometimes think to power that up but then I change the thought because I believe whatever is in my wallet is good and through trading, I can grow it more than keeping it in my wallet. I mostly trade high whenever there is a pump so I sell high and buy back when the price is low but in the last few months, I did not get that opportunity so that liquid is sitting idle. I hope that happens and in most cases, I was successful because every time the price goes up by 15 to 20% then it goes down and that difference is the opportunity that I try to grab and grow my overall inventory. I am not a trader so I usually avoid day trading because its a risky game.
Thank you