Any suggestions that whether using DCA on Bitcoin works?
Sometimes itâs worked. Sometimes itâs failed. What else is new?
In my observational experience, people referring to âDCAâ are often optimists who dislike calling it what it really is, which is adding to losers. My own strong preference and bias are for adding to winners. 
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Yeah - why add to losers, the market has already prove you were wrong in the first place?: If the market is agreeing with you add to winning trades. 
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Absolutely.
Itâs for people who want to âbe rightâ, isnât it?
People who want to try to turn an (initially small) loser into a winner, and donât care how long they have to wait to do so, and donât care how much they risk to avoid a loser.
And they really do, typically, have a very, very high win-rate.
Until one day the roof falls in, of course. 
Like that âKing of Forexâ guy on Youtube. Hundreds of followers (including quite a few right here at Babypips, Iâm sorry to say) were singing his praises and loved his colossal win-rate. He was on Youtube to promote his managed account service, of course. But just recently, sure enough, lots of his subscribers have âsuddenly, unexpectedlyâ lost their accounts and now theyâre all shocked and horrified and think they were just fantastically unlucky by this unprecedented development.
But if you try to tell them before they subscribe that the guy persistently adds to losers and will probably eventually blow their accounts, then youâre just whining and criticising and youâre a ânegative posterâ and nobody wants to know.
And all they were doing was âdollar cost averagingâ! 
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Yes - brokers have to publish theses facts - the average win rate, as you say, is high about 60%
The thing is Fear and Hope
People cut winners out of fear of having their winnings taken away and let their losers run in the hope that things will turn good.
It should, of course, be the other way around. The old cliche âLet your winners run and cut your losers soonâ is so true.
People are hopeful when they should be fearful and fearful when they should be hopeful.
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This is a pretty profound observation for a quiet Wednesday afternoon in a trading forum.
Iâm sure itâs right, though - here and in plenty of other contexts, too. 
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I like this phrase; I feel like Iâve heard it long ago.
But I am somewhat curious at the responses to this question. I was under the impression that dollar cost averaging was more of an investment/portfolio management principle than a trading one.
For example, donât the vast majority of passive investors DCA through retirement contributions at work?
Isnât this why the S&P and other assets that reflect overall economic growth are seen as top-tier investment vehicles for average people? Because their proven history of reliable returns over decades?
Is there a distinction between DCAing and this sort of investing that I am missing?
Because if not, Bitcoinâs DCA returns look outstanding.
Sure, the % gain return is diminishing over time. But if you have a long-term bullish thesis, why wouldnât DCAing be a good strategy if the fundamentals are bullish? Obviously, that is a subjective conclusion youâll have to reach yourself. But if your conclusion is correct, adding to the short-term loser lowers your cost basis and increases long-term gains.
For example, I have a belief that Bitcoin will reach a double-digit market cap. Why wouldnât I add to long-term positions during pullbacks?
Isnât this why they say most traders donât beat the market? Because they canât beat the DCA returns from the S&P, BTC, or other assets in secular bull markets?
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They would for you, Iâm guessing.
Not for me. I have to make my living through trading because I canât do anything else (and am maybe even too old to learn, now!). I canât afford a mistake over something like that. I canât afford to try to judge things from âfundamentalsâ. Iâm a trader, not really an investor (only in real estate, anyway).
I agree.
I donât believe it is, no.
I believe most traders donât beat the market because they have no proven edge, and the majority donât even actually. know how to tell whether they have a proven edge, and are trading primarily on hope and guesswork.
This is opinion only.
I respect that some people have different opinions.
But I offer the observation that everyone I know (and everyone I have ever known in my long career) who actually makes a living from trading agrees with the opinion mentioned above.
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Exactly so.
Itâs a classic example of what we psychologists call the âtwo groups syndromeâ or âtwo groups fallacyâ.
There are two very different - and sometimes, in fact, diametrically opposed - consensuses of opinion, on such subjects, and which one youâll always hear depends on which group you always ask.
People feel, in principle, often for good reasons, that a very big sample size will produce a more reliable (i.e. âmore likely to be rightâ) consensus of opinion.
As any statistician will tell you, thatâs normally valid and correct reasoning, but its validity and correctness actually rest on the hidden assumption that the two groups are randomly drawn from the same population. In this case that isnât so, so the whole thing is actually nonsense and therefore produces mistaken conclusions.
What happens here - and with many similar issues - is that there are two different âpopulations,â (i.e. not two different randomly selected groups within one population): thereâs a really huge group called âPeople whoâd like to trade successfully and safely with steady profitsâ and then thereâs a really tiny group called âSuccessful tradersâ.
These two groups of people very often have strongly opposed opinions about the key issues involved.
If you just ask as many people as possible, youâll always go away accepting the widespread (but often ill-informed) consensus of opinion.
This is, in effect, what happens in forum discussions, without most participants appreciating that itâs happening.
If, instead, you start by correctly identifying the very small group of long-term successful traders (this is really very difficult to do, and professional marketers, among others, aim to keep it that way!!), youâll form the opposite impression.
This situation has many occurrences and applications, especially in the social sciences, but in other areas of everyday life, too.
Itâs always a possibility when you ask for advice on âHow to do something successfullyâ which only a very small group of people do successfully.
The chances of asking the wrong people are obviously enormous.
And with anything involving âHow to make money from somethingâ theyâre even more enormous, because most people instinctively but in this case unwisely go to the web for information, typically not appreciating that itâs much easier for the âteachersâ to make money from âteachingâ than it is from trading. And thatâs why thereâs so much more misinformation around than information.
Correcting this problem, in this instance, all starts by understanding with total clarity that people who can trade successfully and safely for the long term, accumulating profits steadily and reliably, are NOT people who spend their time posting videos on Youtube, and that there are valid and good reasons for that. Most people never get that far.
All of this was really just a verbose way of pointing out that the most important decisions you can ever make about learning how to trade profitably are the âWho to listen toâ decisions.
No charge for this lecture and apologies for its length. 
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Very interesting⌠So no long-term positions at all? Whatâs your longest hold-time, if you donât mind my asking?
AlsoâŚ
Do you have any advice or resource(s) on this?
Holy shâŚ
Thank you for this!!! Please donât apologize for its length!
It really helped connect a few dots from the other thread where you guys were saying things like:
&
And I was responding with, âNo, look how much research I do!â
Now I see how dumb that probably sounded.
So now that I might be getting closer to asking the right questionsâŚ
How might IâŚ
???
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About 7 hours, I think. But even thatâs rare, for me (have actually had a couple of 6-to-7 hour trades shorting the S&P very recently, but these are pretty exceptional circumstances!).
Yes, absolutely! âProfitability & Systematic Tradingâ by Michael Harris is what you need.
(âBeyond Technical Analysisâ by Tushar S. Chande and âTrade Your Way to Financial Freedomâ by Van K. Tharp are also both very good, but the Harris book is the direct answer to your question.)
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True, that.
Itâs only really because of your username, @playingmarkets , that Iâll give this one a shout, too -
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[quote=âpink_hat_trader, post:9, topic:1279062â]thereâs a really huge group called âPeople whoâd like to trade successfully and safely with steady profitsâ and then thereâs a really tiny group called âSuccessful tradersâ.
[/quote]
Whatâs the difference here? One whoâd like to and one who actually does, or do the successful traders do/think something else?
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Yes An enormous number of people would like to, but few succeed.
I think so, yes. That, too.
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