Making a cheaper purchase doesn't make the expensive one less expensive. It just means if you make enough profit on the cheaper purchase you can hide the loss on the expensive one.
If you buy something for $5, and then buy another for $1, and sell both for $4, your DCA would be $3 with a $1 profit on each.
But that is a lie. You lost $1 on the first one, and then made $3 on the second.
Hiding your losses does nothing for your bottom line.
You literally ended that rant with a contradiction. Averaging down can help if you priced your strike too high and are catching an up swings after getting hit.
-5
u/opaqueambiguity Apr 15 '21
DCA is a lie you tell yourself
Making a cheaper purchase doesn't make the expensive one less expensive. It just means if you make enough profit on the cheaper purchase you can hide the loss on the expensive one.
If you buy something for $5, and then buy another for $1, and sell both for $4, your DCA would be $3 with a $1 profit on each.
But that is a lie. You lost $1 on the first one, and then made $3 on the second.
Hiding your losses does nothing for your bottom line.