What is DCA?

Actively trading in the markets is stressful and time consuming in many ways, depending on these factors unsuccessful results can be obtained in investment moves. Making more logical investment moves and increasing the profit potential depends on following a series of strategies. One of the strategies used to minimise current risks and regularly take profits by investing in the markets is known as DCA. So what is DCA, what does it do, and how can it be applied in cryptocurrency markets?

What is DCA (Dollar Cost Averaging)?

DCA is a concept known as “Dollar Cost Averaging” and translated into Turkish as “Dollar cost average”. DCA, which is basically considered as an investment strategy, aims to minimise the volatility effect in asset purchases and recommends purchasing at regular intervals.

The logic here is that small and equal purchases carry less risk than bulk purchases and are much less affected by market volatility. In order for this to be possible, first the price is flattened on average and it is aimed to buy at regular intervals in the long run. Since this type of investment is long-term, it also reduces the short-term and instantaneous negative decision effect; the investor has the opportunity to maintain their own investment strategy without being affected by market volatility.

In this strategy, there is no obligation to follow the general market conditions or take time to analyse as the asset can be bought regardless of the price. Therefore, the DCA strategy not only saves time, but also enables investment decisions to be made in the long run without spoiling the assets and without being affected by volatility.

What Are the Benefits of the DCA Strategy?

Dollar cost averaging is a strategy in which the amount invested in a target asset with regular purchases is divided by the total amount, this is also known as the fixed dollar plan. This strategy can be used in commodities, stocks and fiat currencies, as well as in crypto markets. Its main advantages are:

• The DCA strategy reduces the risk of investors making the wrong investment at the wrong time because it is independent of price and time. Since the strategy is based on the assumption that the invested asset will appreciate in the long term, it ensures that it is not affected regardless of market conditions. Even if there are price decreases in the short and medium term, it helps to make profits in the long term by continuing to buy.
• The effort and time required to research the analysis used while investing are not present in the DCA strategy. The absence of instant trades eliminates the need to devote time to basic technique, eliminating greed and anxiety factors. Therefore, investors will invest more comfortably and easily and do not act in panic.
• There is no need to be a big investor or have a great knowledge of the market to implement the DCA strategy. Therefore, it is suitable for investors of all levels, including new entrants to the market.
• The idea that the investor makes occasional purchases works like occasional savings and provides savings after a certain point. When the valuation of the investment is added to this, a high rate of profit is obtained on the savings. The DCA strategy is very useful when making long-term savings, such as a retirement plan.

However, the basis of the DCA strategy is the idea that the invested asset will rise in the long run. For this reason, it would not be right to apply this strategy to assets that follow a falling chart in the long run, but the probability of low life in most reliable investment instruments is extremely low, especially in the long term.

What is Binance Recurring Purchase?

Inline buy is one of the new features offered by the popular DCA strategy cryptocurrency Binance, and it allows users to make practical, easy and fast cryptocurrency investments. In Binance recurring purchase, investors can determine how much they can invest in which cryptocurrencies and in which periods. The advantages provided by this logic are as follows:

• It is practical and fast.
• There is no requirement to follow the market.
• Supports credit and debit card purchases.
• There is no hassle of using a manual tool.
• Provides stable portfolio growth.
• Allows disciplined cryptocurrency savings.
• Reduces volatile market risks.

How to Use Binance Recurring Purchase

There is no need to open a new account to use the Binance recurring purchase feature, users with existing Binance accounts can take advantage of this feature both on the app and on the website.

You can implement recurring purchases on the website as follows:

• Log in to your Binance account and click on Buy Crypto — Debit/Credit Card options in the top menu.
• There is a “Recurring Buy” button at the bottom of the purchase page. By activating this button, you can activate the recurring reception feature.
• Then, select the currency you want to receive at regular intervals and the fiat currency to be used in return. In the meantime, determine a regular purchase amount that is suitable for you, such as 150 dollars or 1000 dollars.
• Click on the recurring purchase item below and specify the interval at which purchases will be made. (Binance gives you the chance to buy weekly, biweekly and monthly. In addition to these features, it also gives you the opportunity to set the time to buy.)
• Click “Add New Card” to purchase after these steps and save the card information. In this section, you can only use VISA and MasterCard debit or credit cards, you can add up to 5 different cards. If you wish, you can use a different card by clicking the “Change Card” option in the next purchases and remove the cards you want to delete via the trash can icon next to it.
• Select the card and click “Continue” to confirm the duplicate purchase order.

After the purchase order is processed, it goes to the order page and you will be notified once it is completed. Completed trades can also be checked in the order history. You can manage the order by clicking on one of the recurring orders from the crypto purchase page. This page shows the frequency of execution of the order and other details.

It is up to you to make changes to the plan or stop the purchase altogether. You can rearrange the recurrence time, purchase amount and purchase units from the Manage order section.

Binance Recurring Investment Risks

Using the recurring DCA strategy helps you have a substantial long-term investment in cryptocurrencies and is therefore a frequently used method. With this strategy, which minimises risks, you can expand your investment portfolio by making smaller but more frequent purchases. By adjusting the market timing, you also minimise the time required for continuous monitoring and provide the greatest benefit.

In addition to these, repeated purchase does have some risks in itself. First of all, recurring investment may miss some of the high-paying opportunities in bull markets, but long-term investment plans are often much more profitable than short-term increases. Also, compromising some of the gains is much more sensible than the high risk of incurring losses and gives you a continuous gain. Another disadvantage is that crypto money markets bring a lot of profit, especially in the long run. In other words, it may be more profitable in the long run to make a large investment in one go rather than investing less at intervals. But here to, there is a similar situation as before, minimising risk is the main goal in this strategy.

As a result; With the recurring purchase method, you are not affected by the negative conditions in the markets and you gain the habit of investing in the long run. Consistently increasing the holdings in the volatile crypto market can bring you huge profits after a few years.