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Why is Dynamic DCA unpopular?

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by COINS NEWS 80 Views

I've seen folks around here often knock dynamic DCA, calling it just another way of trying to time the market. Honestly, I don't think that's right. Dynamic DCA's more about reacting to the market with a more sound approach.

Take a couple of weeks back, for instance. I paused my DCA because risk went above 45 on the metric I use. I only DCA below 45 and the lower risk goes, the more I DCA. That's the dynamic part.

This is not calling or predicting anything. But the market just spiked up to 49k and we've been in the green for weeks. Risk has increased and I think regardless of any indicator, it just makes sense not to DCA at this point and wait a little?

Now, recently after the ETF approval, Bitcoin dropped to around $41k, risk dropped below 40, I went for it and put all the cash I'd been holding for the past weeks into the market.

Dare I say, this feels great.

This move wasn't about trying to nail the perfect market timing. I just adapt my DCA to what is happening in the markets. Now we're at 39k and risk has dropped even lower, so I'm about to put my next purchase in.

So yeah, I reckon dynamic DCA is less about trying to outsmart the market and more about adjusting your approach based on what's happening at the moment. Seems to work out better than sticking rigidly to a set DCA plan, but what do I know? I just lowered my average cost basis compared to mindless DCA. Why does it get such a bad rap?

Edit: I use this as a tool and I highly recommend it, but you can use anything that shows risk. Please stop DMing me.

submitted by /u/AlexWasTakenWasTaken
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