Learn · Lesson 5
Dollar-cost averaging.
Dollar-cost averaging (DCA) is the idea of spreading purchases over time on a fixed schedule, such as every week or every month; this lesson explains the term, not whether to do it.
Why beginners learn it
- Removes timing pressure You are not hunting for the lowest candle on a 15-minute chart.
- Builds a habit A simple plan is easier to keep than a guess at "the bottom."
- Averages out timing Each scheduled amount goes in at a different price, so the average reflects many days instead of one. That says nothing about gain or loss.
What it is not
DCA is not a promise of profit. Prices can fall for a long time. This lesson only explains the idea so you can understand the language people use.
How it pairs with the rest
DCA is one of three terms beginners often meet together. Holding is about not reacting to every price move. Exit planning is the idea of writing rules down in advance. The next two lessons explain each term; none of them is a plan for you.