The most important topic in trading and investing, either in bull run or bear market: We have a lot of DCA strategies, I will name 3 below that I like:
☑️ First Strategy: On time by setting one day per week or per month to buy, personally I prefer to buy often towards the end of the month for several reasons:
+ Around the 25th we have the big dips of the Monthly red candle
+ Most people have difficulties to end the month and possible that they will sell at a loss towards the end of the month, I speak after feedback, I invested at the beginning of the month after receiving my salary and I sold around the end of the month in loss.
DCA on the first two weeks of the month in the bear market isn't the best thing to do, but DCA towards the end of the month between the 20th to the 25th or the 1st of the following month is the best, for having good dips towards the end of the month, but it makes sense when you have a Monthly red candle with a large body and almost no wick towards the end of the month it remains very good level for DCA.
The blue line: the 20th of the month,
The orange line: the 25th of the month,
The green line: the 1st of the following month
- After back test on the 2022 Bear market over 10 months, we had 8 end of the month with very good dips, and 2 months (March and July) with high points (circled in red).
- Of the 8 months with very good dips, we had two months with the first of the following month at the top (circled in yellow).
- The 6 months out of 10 we had the best dips of the month from the 20th to the first of the following month (circled in purple)
Here I'm just talking about the DCA but not the Bottom or the TA, the price can continue to fall again the following month, finally it's better to invest on the dips, and avoid not being fooled after each beginning of the month by buying the tops!
https://www.tradingview.com/x/gSHJKV3w/
☑️ Second Strategy: By folowing the price action via supports and resistances with the TA to buy dips when the indicators are oversold or when they confirmed bullish divergences.
☑️ Third Strategy: With hedging via the Defi in the liquidity pools by adding liquidity, and especially against the dollar so 50% in crypto and 50% in dollar.
This makes it possible to balance the entry price once time it drops, and the best part is that we will receive a reward which is a % on the DEX trading fees, and the best so we have the farming of the LP (Liquidity Pool Tokens) that 'we receive after adding liquidity in a liquidity pool, finally we can stake the LP in a farming pool which will allow us to earn great rewards of up to 80% the APR like OSMO/USDC on Osmosis.
I'm sorry to be long, but I imagine that it will help newcomers to easily understand DCA & the challenge in terms of staking and farming.
One last point on farming and my strategy for the moment:
When we get closer to the bottom or we will have a big bullish signal, then I will leave the Crypto/USD farming pool and if we have good lows I will swap the USD against the crypto which has lost a lot in the DCA portfolio. Finally, everyone has their own way of managing risk!!!
The OSMO/USDC Farming Pool on Osmosis: https://app.osmosis.zone/pool/678
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