All about DCA. What is DCA and How to use it?
Dollar-cost averaging (or DCA) involves spending equal amounts of money at regular intervals, no matter how the cryptocurrency is performing at the time.
This guide, which we have prepared about Dollar Cost Averaging (DCA), which is frequently used by advanced investors but also very curious by beginner investors, will guide you in your new investments. This investment model, known as the dollar cost average, is to invest independently on a regular basis and in small amounts, rather than investing at a fixed price. This form of investment is a long-term investment and should be made professionally. Most of the investments made on crypto exchanges began to be made using the DCA model. Especially with Binance DCA, you can make high profits in the long term investment. How to do this, what you need to pay attention to, the pros and cons of which we will consider in this guide.
What is DCA?
DCA is the process of periodically purchasing the target asset. This is how we can explain it in the simplest and simplest way. It can be used on all investment models. It has become used very often for crypto assets. Whatever the price of the asset you are going to buy, you start to buy it gradually and invest for the long term. Since the prices of assets are constantly changing in the markets, the DCA investment model is an excellent investment plan for investors.
DCA Pros
With the advent of crypto currencies, the DCA model, which has become popular again, of course, has some advantages and disadvantages. DCA Pros, which we have listed below, will tell you about what your investment can bring you.
· It is a method that minimizes your investment risk and allows you to manage the risk well.
· It is flexible and safe.
· Without investing in any asset at once, you will be profitable in the long run by dividing it by time.
· It is always more advantageous to invest regularly with low budgets.
· It gives you different options for investment timing. For example, at a time of a possible crisis, it prevents you from losing all your investment.
Binance DCA
The DCA investment model is actually a model that is not very recommended for crypto coins. There is even this warning on the Binance DCA page. This investment model, which is usually suitable for stocks and other assets, is not recommended for crypto currencies, let’s explain it as well. You want to invest $5,000 in Bitcoin or any crypto currency and you want to divide this investment into 10 months. You bought $500 worth of Bitcoin every month and made a total Bitcoin investment of $5,000 at the end of the tenth month. If there is a bull market for this 10-month period and Bitcoin suddenly rises, your investment will be wasted. That is why investment experts do not highly recommend using the DCA model in the crypto currency market. But the opposite can also happen. While you are doing DCA, the bear market can also be entered. That’s when you make a profitable investment.
What is Binance Recurring Buy?
If you want to take this risk and invest in DCA despite everything, you can use the Binance Recurring Buy feature. Binance Recurring Buy, which includes a full DCA model, is an excellent feature that allows you to buy any amount of cryptocurrencies in the periods you specify. It makes your investment automatically in line with your orders and adds crypto coin to your existing investment portfolio by purchasing crypto coin on your behalf on the specified date. In order to use this feature on the Binance exchange, you must have a credit card registered in the system. By defining your credit card in the system, you ensure that a renewed purchase is made for you. You can make a daily, weekly or monthly collection of the amount you want from your credit card and purchase any crypto coin you want on your behalf. Many other crypto exchanges also have this feature, but the most comprehensive one is on the Binance exchange. When using this feature, make sure that your credit card limit is always appropriate. If the system cannot collect from your credit card, it cannot perform the recurring buy action.
Why use Recurring Buy to DCA?
If you have decided to use the DCA method and are ready to take all the risks, you should use an investment vehicle for Recurring Buy to DCA. This will make your job even easier. If you are not going to use it, you will have to do it manually. This can complicate your work. Recurring Buy to DCA is the most practical solution. You enter your credit card information into the system, determine the purchase period and amount, and sit back and enjoy your investment. If you want to do it manually, you need to check these dates frequently and make the purchases manually. This will be a little difficult. Because following and purchasing each purchase date may cause some disruptions. For Recurring Buy to DCA, you should definitely choose safe systems. Binance DCA is the ideal method for this. It buys the desired amount of cryptocurrencies on the dates you want and automatically adds it to your investment. In most exchanges, this system may not work well. Sometimes, although there is a purchase order, there may not be a purchase at that time. These are the problems you are likely to encounter.
How to sign up for Recurring Buy?
The Recurring Buy procedure is almost the same in every system and exchange. But we will consider Binance and talk about the trading steps accordingly. To sign up for Recurring Buy, you must first have an account. Create a membership on the Binance exchange and confirm your account. Follow the suggestions below for next steps:
1. Log into your Binance account and click on the credit card tab
2. Activate the Recurring Buy option
3. Choose your currency and choose the crypto coin you want to buy
4. Choose from 1 week — 15 days or 1 month timeframes. These periods indicate in which timeframes the purchase will occur. You can even choose the time zone in this section.
5. In the second step, you choose which credit card you will make the payment with. If you do not have a credit card registered on the Binance site, you can add a new credit card from the add card link.
6. Confirm by checking the order information you entered.
7. You have to do these operations within 1 minute. Because the value of the cryptocurrency you want to buy may change during this time. If the price changes, you will have to start over.
8. In some exceptional cases, the purchase may not take place. In this case, enter the member panel, click the repeat the operation button and do it manually.
Although it is the best cryptocurrency exchange in the world, even Binance exchange can sometimes have minor technical issues. Consider this possibility and review your orders from time to time. It is beneficial for you to always control your investment.
Summary
First of all, let us state that; we do not give investment advice to anyone here. We only introduce and analyze current and frequently used investment models, such as Dollar Cost Averaging (DCA). Alongside DCA advantages, we also touch on DCA disadvantages. When you decide to use this system, we offer suggestions on how and where you should trade. The most suitable system for DCA is the Binance DCA system. They have a perfectly designed system for Cryptocurrency Recurring Buy. We repeat; many expert financial analysts note that the DCA system is ideal for buying and selling stocks, but there is no investment advice for cryptocurrencies yet. We talked about the pros and cons of them above. Decide for yourself accordingly and take the most correct steps for your investment.
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Notice: Please make your own investment decisions!
