What is DCA (Contributions in 3 Areas)?

What is DCA (Contributions in 3 Areas)? Over the past 2 years, we understand the importance of buying Bitcoin with DCA today. DCA (Dollar-Cost Averaging) simply means 'making regular purchases regardless of the price.' The most important question for individual investors is: 'When should we buy?' DCA helps us precisely with that. Let's take Bitcoin as an example. If you believe in the long-term rise of Bitcoin, you can use the DCA method. If we had been doing DCA over the past year, what would our average cost have been 👇?

• Investing $100 every week
• Total investment: $5,300
• Current value: $10,893

1️⃣ Lowering Average Cost: The biggest benefit of DCA is lowering the average cost. This is especially valid in a falling market. Buying in while the Bitcoin price is rising increases your cost with every purchase. That's why buying Bitcoin with DCA over the past 2 years has been important.
The second contribution is psychological.
2️⃣ Ease of Decision Making and Stress Management: The second contribution of DCA makes it easier for us to focus on ourselves, our families, and our work. It eliminates the decision-making process for individual investors, reducing their daily stresses. You don't have to constantly watch the screen. Especially when there are significant market downturns, since you'll be making purchases anyway, it makes it easier to get through these periods. Another contribution is helping us think long term.

• 3️⃣ Thinking Long Term: Finally, the DCA strategy directs us to think long term. In individual investment, the most important thing is to be able to think medium and long term. As you can see in the graph below, it's almost impossible to know the peak and trough points of the market. Even the most professional investors don't know this and don't try to know it. By regularly making purchases in Zone 3, you can lower your cost. Later, selling in Zone 4 is not difficult. The difficult and impossible thing is to buy in Zone 1 and sell in Zone 2. Real losses occur when we aim for this.

✅ Conclusion: DCA for Risk Management! Individual investors, please remember this: For professional risk management, DCA is the most beneficial method. When you make bulk purchases, you take on a risk that you may not be aware of. By following medium-term market cycles and adjusting the purchase amount, you can balance your risk. For example, when Bitcoin dropped below 30K, I doubled my DCA purchases. When it dropped below 20K, I made very aggressive purchases. However, still without looking at the price."
I hope this helps! Let me know if you need further assistance