Controlling emotions and Dollar Cost Averaging (DCA) applied in criptocurrency ADA, BTC and ETH
Dollar-cost averaging (DCA) is an investment strategy in which an investor divides up the total amount to be invested across periodic purchases of a target asset in an effort to reduce the impact of volatility on the overall purchase. The purchases occur regardless of the asset's price and at regular intervals. In effect, this strategy removes much of the detailed work of attempting to time the market in order to make purchases of equities at the best prices. Dollar-cost averaging is also known as the constant dollar plan.
Controlling emotions for investing is a skill absolutely necesary to avoid bad decisions. According with great investors, one of the best strategy is to set one day a week to invest, not depending on the ups and downs of the market. If combine this strategy with DCA is posible to gain control about our investing. The succes of our inversions is another story and depending on a lot of variables.
With this analysis I wanted to find the best time to invest, with the idea in mind that the best way to buy criptocurrency is when it price is low.
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Dataset source: https://www.cryptodatadownload.com/
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Notebook in Colab for ADA: Analysis for Cardano
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Notebook in Colab for BTC: Analysis for Bitcoin
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Notebook in Colab for ETH: Analysis for Ethereum
Conclusions
- The best day to buy ADA is on Friday, just after the day with the lower price in the week.
- The best day to buy BTC is on Monday, just after the day with the lower price in the week.
- The best day to buy ETH is on Saturday, just after the day with the lower price in the week.
