Learn · Buying strategy
What is dollar-cost averaging (DCA)?
Instead of trying to find the perfect moment, you buy a fixed amount at regular intervals. Here is what that does and does not do for you.
In short
- DCA means buying a fixed amount on a schedule, for example 50 USDT every week.
- It reduces the risk of putting everything in at a bad moment. It does not guarantee a profit.
- Fees matter: many tiny purchases can cost more than a few larger ones.
How it works
You pick an amount and a schedule and stick to it whatever the price. When the price is low you buy more coins, and when it is high you buy fewer, so your average cost ends up between the extremes.
A worked example
Example with made-up prices
You invest 100 USDT each month for four months, when the coin costs 10, 8, 12 and 5.
| Month | Price | Coins bought |
|---|---|---|
| 1 | 10 | 10.00 |
| 2 | 8 | 12.50 |
| 3 | 12 | 8.33 |
| 4 | 5 | 20.00 |
You spent 400 USDT and own 50.83 coins, so your average cost is about 7.87. The simple average of the four prices is 8.75. You paid less than the average price because the cheapest month bought the most coins.
What it helps with
- It removes the pressure to pick the perfect day.
- It builds a habit and reduces emotional decisions.
- It spreads your risk of buying right before a drop.
What it does not do
- It does not protect you if the coin keeps falling or goes to zero.
- In a steadily rising market, buying everything on day one would have done better.
- Fees add up on small frequent purchases. Check your exchange’s fees.
- It works only for assets you would be happy to hold for a long time. DCA into a weak project is just a slower loss.
How to start
- Choose an amount you could afford to lose.
- Choose a schedule (weekly or monthly) and a coin you have checked.
- Use your exchange’s recurring-buy feature, or buy manually.
- Write down your plan, including when you would stop.
- Review it every few months, not every day.
Common mistakes
- Stopping after a drop, which defeats the purpose.
- Buying a different coin every week.
- Ignoring fees on very small purchases.
- Using money you may need soon.
Try it
Open the DCA calculatorAdd your buys to see your average entry price and break-even.