DCA works for indexes, not for falling single name
If a stock is in a confirmed downtrend, adding all the way down isnāt āsmart long-term investingāāitās subsidizing your own bad timing. You confuse conviction with stubbornness. āIām just lowering my cost basisā becomes a shield to avoid admitting the original thesis is broken. Waiting For Bullish Trend Is Better Instead of shoveling cash into a falling knife, wait for the behavior of the stock to confirm demand is back. Price back above the 200āday moving average. Higher highs and higher lows on the daily Volume expanding on up days, shrinking on down days. Pros donāt marry entries. They cut losers, wait, and only add back once the trend actually turns: price back above key moving averages, higher highs/lows, and strong volume on green days. Stop DCAāing your mistakes. Let the trend flip bullish, then press when buyers are clearly in control.
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66 Comments
Green Gambit@defive Ā· 6mo
Buy high and sell low, works every time. Lol
Paul N@pauln Ā· 6mo
Youāre just saying āTime the marketā using different terminology. I prefer time in the market. I disagree with your sentiment. I buy when good quality securities and sectors are suddenly out of favour because of reasons that donāt really make sense or you know will eventually be resolved. Itās very difficult to jump in exactly at a bottom. Anyone looking at a stretched out chart of the S&P will see āthe world is endingā and you will lose all your money predictions never materialized and can visualize for themselves how silly a statement like that is.
Ć ll-ĆÆz @shift4 Ā· 6mo
I think you're confusing trading and long term investing. There is a huge differance between the two.
Mr Jack Trading Cat@mrjacktradingcat Ā· 6mo
When I stopped trying to time absolute perfect entries and made sure we were over 200 ideally 50 got much better results
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