The conventional logic is to automate your DCA so that money is deducted from your pay cheque every month and used to buy Bitcoin. But I have since learnt that some of us like to DCA on a weekly or even daily basis. We think that manual purchase is more bang for our bucks than autoinvest feature from Binance. We tend to buy on Mondays - maybe because it’s the start of the work week and we want to do something empowering that will help us defeat the Monday blues.
My question for you if you choose to buy manually: to what extent do you time the market when you make your purchase? Do you look at the 15 min chart and make sure that the crab is trending on the way up before you go in for your purchase? Or do you keep it mentally simple and just buy your BTC at a specific time of the day - because life doesn’t permit you to examine the charts?
Originally posted on r/cryptocurrency. I compiled and beefed up the following users’ routines for your investing reference:
The priced-in buyer
- I set buy orders about 5% lower than the current price of Bitcoin
- I now try to buy Bitcoin under $20k. If it’s above $20k, I stack the cash and only buy when it falls in value.
The spontaneous buyer
- I plan a buy maybe 2-3 times a month but not on a specific day as I just make my purchase when I feel it’s the right time to buy
- I just buy something when I have money to spend
The ‘look see look see’ buyer
- I buy on the same day every two weeks but vary my amounts depending on market sentiments. If the market has dipped, I will buy a bit more. If it pumps, I will buy a bit less.
- If there is a big dip the day before I normally DCA, then I will buy early as rebounds are common.
My conclusion
I think whether you choose to DCA automatically or manually has a lot to do with whether you are a maximiser or satisficer. I may be over-generalising but my understanding is that satisficers don’t sweat the small details and are contented with selecting things that are good enough. This explains why some people will choose the automatic way of DCA because staring at the charts for the best possible price point will drive them nuts. However, for maximisers, they like to be thorough and ensure that they optimise their resources. Hence, they don’t mind spending extra time to check for support levels and set up limit buys. So the key thing is to know yourself. Just do you so that you can sleep soundly at night.
