Active trading can be time-consuming, stressful, and give poor results, but you don’t need to worry because many other options are available for you. You can seek an investment solution that is less time-consuming and less demanding. Of all the available investment options, dollar-cost averaging, or DCA, is the best way to decrease some risks of entering a position.
Dollar-cost averaging (DCA) is a great investment solution that focuses on lessening the impact of the volatility after buying the assets. It consists of purchasing equal fiat money of the asset frequently.
Why should you use dollar-cost averaging?
The advantage of DCA is that it decreases the risk of betting at the wrong moment. Market timing is one of the difficult things to do while investing or trading. Although the way of trade idea is often correct, the timing might be wrong, which makes the whole process wrong. DCA aids to decrease that risk.
If you split your investment into small portions, there are chances that you will have improved fallouts than if you were investing a massive amount in a single huge portion. Buying a poorly timed object is very simple, and it can bring less than perfect results. Additionally, you can reduce some prejudices in your decision-making.
When you try DCA, the tactic will make the choices for you. DCA doesn’t decrease risk. The notion is to ease the entry into the marketplace so that the possibility of bad timing can be reduced. DCA completely will not assure a successful investment – you should consider some other factors. Timing the marketplace is very hard, and even leading trading experts sometimes find it hard to understand the marketplace correctly.
If you apply a dollar-cost average, you might also require thinking of your exit plan. To be exact, it’s a great trading tactic to come out of the place. This can be a simple process if you have decided on the price range.
Again, you split your investment into equivalent portions and begin to sell them when the marketplace is closing in on the decided price range. That way, you can decrease the chances of not coming out at the right moment. But that depends on your particular trading system.
Some people use a “buy-and-hold” tactic for DCA, where the objective is never to make the sales because bought assets are likely to appreciate repeatedly.
What is Binance Recurring Buy?
Applying a DCA or Dollar-Cost Averaging investment method, Recurring Buy lets you pick the desired crypto you wish to buy, the number you wish to purchase, and how frequently you would want to purchase. It does not just save time; it also helps save you the trouble of attempting to time the marketplace.
Furthermore, when you use Recurring Buy, you can quickly decrease the impact of market volatility, reduce the chance of buying at a less than perfect timing, and gradually develop your crypto portfolio via long-term appreciation. Recurring Buy can help the stress of buying manually eventually by setting automatic crypto purchases despite how demanding you get.
Why use Recurring Buy to DCA?
Recurring Buy permits you to mechanize the purchasing of crypto. It is a DCA investment method that enables users to pick their desired cryptocurrency. This exceptional feature offers plenty of advantages such as easy access to other services, speed, and ease.
1. Steady Portfolio Development
DCA is the main tactic behind Recurring Buy, where you can invest funds slowly and at frequent intervals in place of all at once. Despite the market condition, the DCA tactic enables you to remain in the marketplace and aid to ease out the price changes that can happen sometimes.
By constant investments at episodic intervals, Recurring Buy allows you to slowly develop your crypto wealth eventually and ignore the impact of a volatile marketplace.
2. Flexibility and Convenience
You don’t need to trouble yourself by making manual purchases with the automated feature. Also, you can select among monthly, bi-weekly, or weekly purchases and what crypto you wish to purchase in advance. Recurring Buy supports more than 50 cryptocurrencies.
3. Easy Access
The initial step to expanding your crypto selection is to prepare your stash of crypto, and you can easily do the same by depositing fiat or Recurring Buy.
Later, exploit profits for your recurring crypto buying and DCA through other Binance products like buying your first NFT, pools/launchpads, trading, yield farming, or staking.
How to sign up for Recurring Buy?
- Select your Cryptocurrency and enable the option of Recurring Buy
Create and log in to your account and click on the (Debit/Credit Card) option. Then select the desired cryptocurrency and enable the feature of Recurring Buy. For internet users, click on the (buy crypto) option and select (Debit/Credit Card).
- Choose your favourite fiat currency.
Select from more than 40 fiat currencies and choose your favourite local currency by thinking about DCA.
- Set up the frequency
Click on the date, and select between monthly, bi-weekly, or weekly intervals. Also, you can choose the time and day for your Recurring Buy.
- Choose your payment methods.
You can select from Mastercard or Visa payments. You can add a new card or choose your existing card.
- Confirm your order details
You will have to confirm your order within a minute because the amount of cryptocurrency and the price will be recalculated after a minute. Click on the refresh button to check the current market rate. Once you confirm your order, the process is done.
Conclusion
Though a permanent tactic, taking frequent incremental and small steps in your cryptocurrency investment by using Recurring Buy can eventually complement your portfolio and get you more significant profits.
But, you will have to ensure that you carefully think about your risk appetite, financial goals, and ease with trading before thinking about initiating Recurring Buys. Dollar-cost averaging or DCA is a redeemed tactic to enter into a place while decreasing the effects of investment volatility. It consists of splitting the investment into smaller portions and purchasing at frequent intervals.
It is challenging to time the marketplace, and people who don’t want to record the marketplace actively can still do investments in this manner. But, as per the sceptics, DCA can make a few investors miss out on profits throughout bull marketplaces. Missing out on some profits doesn’t mean that everything is over, and DCA can still be a handy investment method for several people.
