Easily Buying Cryptocurrencies with Dollar Cost Averaging
So, you're new to the world of cryptocurrency, you've been on Hive for a while and now that you have earned some crypto through blogging and engagement, you want to go all in and invest some of your own money. But you don't know where to start.
Buying and or trading cryptocurrency can be a scary thing. Especially with the high volatility it often entails. Because of this, many learn the hard way that this shouldn't be done with emotion. In fact, when investing and trading, ideally you should be a complete robot. Then comes strategy. When to buy? When to sell.
Today we'll be looking at the buying part and pan out to a long term investment strategy. A very sound and profitable long term one is Dollar Cost Averaging. What is that you ask? It's very simple actually. No complicated math formulas required. With Dollar Cost Averaging the investor invests a set amount periodically, usually at a fixed period as well. This is done independent of what the price is. This way, your buying price over time averages out between the highs and lows, most likely increasing your long term profits.
The first obvious benefit is that you don't have to think too much about it. Just set an amount and period and keep to it. Another benefit is that if you have a monthly salary, you can pretty much use each payout as an opportunity for your DCA strategy. Especially if you don't feel comfortable with investing a large amount all at once.
The downside might be that you might get less of that asset, if it just keeps doing well and rising over time. But with a highly volatile market this is seldom the case, I think.
Here's a neat 2 minute video that probably explains this concept a bit better.
https://www.youtube.com/watch?v=ZFEnwg54Zj4
There are longer videos that go in depth on things, but this one covers the core concept very well.
I am not a financial advisor and you should ALWAYS do your own research, but hopefully this helps you along the way. Also be sure to always pick a project that has potential long term for this strategy.
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