People talk about DCA in, but not enough people talk about DCA out

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People talk about DCA in, but not enough people talk about DCA out

This is not gonna be a huge post, but just wanted to remind that DCA out is a fairly safe exit strategy. For example with 80/20 ratio, 80 percent of the asset would be taken out as it hits various milestones and 20 would be left on hold. With DCA in the purchases occur regardless of the asset's price and at regular intervals. With DCA out it's slightly different in that you take money out as you hit certain asset price milestones. This works pretty well during a bullrun especially. Here's a example of it.

Coin A is worth $10 000 at this point. After doing some research and checking various sources you believe that the price can go up to $35 000 during this bull run.

Then you split this coin into two parts, 20% you will not touch and 80% you will take profits.

Then you create your thresholds. Here is an example:

$15 000 – Taking out 20% of 80% (Or 16% of the total) – $2400 profit

$20 000 – Taking out 20% of 80% (Or 16% of the total) – $3200 profit

$25 000 – Taking out 20% of 80% (Or 16% of the total) – $4000 profit

$30 000 – Taking out 20% of 80% (Or 16% of the total) – $4800 profit

$35 000 – Taking out 20% of 80% (Or 16% of the total) – $5600 profit

Total profit: $20 000

20% of $35 000 stays in the coin – $7000 in holdings

This is not a financial advice, and it could very well be that you would've profited more without taking anything out and just hodling for the next 5 years. This is more of a safe play, with potential to reinvest if the market cools down. Would be interested to hear any comments on this.

submitted by /u/shapeofanl
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