TAILORED TO YOUR INVESTMENT NEEDS
DYNAMIC DCA
Dollar Cost Averaging (DCA) is a strategy used to eliminate emotions from investing. DCA means to invest a fixed amount of $ on a regular basis, regardless of price or risk. This makes you less exposed to large swings in the market.
Dynamic DCA, means that the lower the risk is, the more you buy. Similarly, the higher the risk is, the more you sell. This practise will get you a low average buy-price, and a high average sell-price. Read more about Dynamic DCA in our Blogpost.
STRATEGIES
A strategy will make you consistent as an investor and help you avoid impulsive decisions. You can choose to have a conservative Dynamic DCA strategy, an aggressive Dynamic DCA strategy, or something in between.
Pick a pre-made strategy that fits your risk-profile, or combine different strategies into your own.
A conservative strategy is to wait for lower risk levels before you begin to buy. This way you reduce the risk of large drops in your portfolio, and you get a very low average buy-in price. You also begin to sell at lower risk levels. This way you secure profits early on and your risk of missing out on profits is greatly reduced.
- Buy is usually between 0 – 20 Risk
- Sell is usually between 40 – 80 Risk
+ PROS
- Reduced overall risk
- Profits are taken early and more often
- Reduced risk of large drops and devaluation in your portfolio
– CONS
- Less profit
- Might miss out rallies to higher risk levels
- Might have to wait a long time to buy in
SUITABLE FOR INVESTORS WHO
- Want to slowly increase their portfolio with less risk
- Want to perserve their wealth
- Cannot afford large drops in their portfolio
- Might need to cash out their portfolio with short notice
A moderate strategy is to buy below 50 risk, and sell above 50 risk. This way you make sure you get exposure to the asset, even if the risk does not go all the way down to the bottom. You also make sure you secure profits, even if the asset does not go all the way to the highest risk levels. Still, with this strategy, you get to take part in historic opportunities where the risk goes all the way to 0 or 100.
- Buy is usually between 0 – 50 Risk
- Sell is usually between 50 – 100 Risk (Leave some room between 45 – 55 Risk where you neither buy or sell to avoid placing too many orders)
+ PROS
- Moderate Risk
- Large window of opportunity to buy and sell
- Still get to take part of both very low and very high risk levels
– CONS
- Risk of seeing large temporary drops in your portfolio
SUITABLE FOR INVESTORS WHO
- Wants to increase their portfolio and are comfortable with more risk
- are investing on a medium–to long time frame
- Are not planning on having large expenses in the near future
An aggressive strategy is not for the faint of heart. With this strategy, you wait for the extremes to occur. This means you only buy when the risk is very low, and only sell when the risk is very high. This way, you squeeze out every penny of profit available. However, you risk missing out on buying in case the risk does not drop far enough. You also risk missing out on taking profits if the risk does not go high enough.
- Buy is usually between 0 – 10 Risk
- Sell is usually between 90 – 100 Risk
+ PROS
- Maximized profits
- Less orders having to be placed
– CONS
- Greatly increased risk
- Might have to wait a long time to buy and sell
- Might miss out on buying and selling if risk levels does not reach the extremes
SUITABLE FOR INVESTORS WHO
- Are comfortable with high risk
- Are comfortable with seeing significant drops in their portfolio
- Are investing long-term
- Aims to build wealth
A conservative strategy is to wait for lower risk levels before you begin to buy. This way you reduce the risk of large drops in your portfolio, and you get a very low average buy-in price. You also begin to sell at lower risk levels. This way you secure profits early on and your risk of missing out on profits is greatly reduced.
- Buy is usually between 0 – 20 Risk
- Sell is usually between 40 – 80 Risk
+ PROS
- Reduced overall risk
- Profits are taken early and more often
- Reduced risk of large drops and devaluation in your portfolio
– CONS
- Less profits
- Might miss out rallies to higher risk levels
- Might have to wait a long time to buy in
SUITABLE FOR INVESTORS WHO
- Wants to slowly increase their portfolio with less risk
- Wants to perserve their wealth
- Cannot afford large drops in their portfolio
- Might need to cash out their portfolio with short notice
A moderate strategy is to buy below 50 risk, and sell above 50 risk. This way you make sure you get exposure to the asset, even if the risk does not go all the way down to the bottom. You also make sure you secure profits, even if the asset does not go all the way to the highest risk levels. Still, with this strategy, you get to take part in historic opportunities where the risk goes all the way to 0 or 100.
- Buy is usually between 0 – 50 Risk
- Sell is usually between 50 – 100 Risk (Leave some room between 45 – 55 Risk where you neither buy or sell to avoid placing too many orders)
+ PROS
- Moderate Risk
- Large window of opportunity to buy and sell
- Still get to take part of both very low and very high risk levels
– CONS
- Risk of seeing large temporary drops in your portfolio
SUITABLE FOR INVESTORS WHO
- Wants to increase their portfolio and are comfortable with more risk
- are investing on a medium–to long time frame
- Are not planning on having large expenses in the near future
An aggressive strategy is not for the faint of heart. With this strategy, you wait for the extremes to occur. This means you only buy when the risk is very low, and only sell when the risk is very high. This way, you squeeze out every penny of profit available. However, you risk missing out on buying in case the risk does not drop far enough. You also risk missing out on taking profits if the risk does not go high enough.
- Buy is usually between 0 – 10 Risk
- Sell is usually between 90 – 100 Risk
+ PROS
- Maximized profits
- Less orders having to be placed
– CONS
- Greatly increased risk
- Might have to wait a long time to buy and sell
- Might miss out on buying and selling if risk levels does not reach the extremes
SUITABLE FOR INVESTORS WHO
- Are comfortable with high risk
- Are comfortable with seeing significant drops in their portfolio
- Are investing long-term
- Aims to build wealth
Moonstrategy is not a financial advisor. Do not take anything on moonstrategy.io as financial advice, ever. Do your own research. Consult a professional investment advisor before making any investment decisions.