JoymistaWhat Is DCA (Dollar-Cost Averaging)?
DCA means buying an asset with a fixed amount at regular intervals, such as every month, whatever the price, so your cost becomes the weighted average of your buy prices.
Explained
Because the amount is fixed, you buy more when price is low and less when it is high. DCA reduces the damage of one badly timed entry, but it does not protect you if the asset itself falls over the long run.
Example
Example with made-up numbers100 dollars a month at prices of 10, 20 and 25 buys 10 + 5 + 4 = 19 units for 300 dollars, an average cost of 300 ÷ 19 ≈ 15.79.
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Open in JoymistaEducational content, not investment advice.