QUOTE(Boon3 @ Jun 26 2022, 12:33 PM)
How did my initial posting which showed the same thing different than yours?That was my posting on TSLA.
Without DCA, the cost would have been 61.31.
With DCA, the average cost would be exploded to 245.50.
Analyze what this is saying. I thought it was obvious but never mind, if took the effort and you count out the simplified return won't it say the same thing?
Whereby using DCA. the average cost increases so much? Yup, which is why the question, Where is the upside? What's the advantage of using DCA as a buying strategy.
And am I changing anything? "With DCA and without? What's the big glaring difference? With DCA, the simplified return is 187%. Without DCA, the return is a whopping 1050%!!!!"
The difference is in your postings, you only focused on the percentage return rather than the total return. Your strategy shows that your cumulative return is 1050% but in total it is only 643.90. If one had DCA'ed according to the calculation, they may have a mere cumulative return of 187%, but the total profit is 2758. 2758 > 644. God knows where the remaining 1,411 is parked under. Maybe in similar performing counters, maybe in losing counters, maybe in FD or maybe in EPF.
If one has been successful in replicating such returns (1050% or similar) in all of their other counters
If one has been successful in replicating such returns in half of their counters but the other half of their counters posted negative returns instead, then maybe the overall numbers are not as impressive.
If one managed to be successful in this one (or a few) particular counter but had parked the remaining 1,411 in FD/EPF, then it seems that DCA'ing into this one particular stock is a
more viable alternative when the annualized TWR is 69% (compared to FD 2-4% and EPF 5-6%).
You may argue that TSLA is a unicorn/speculative stock and should not be touched with a 20-ft pole. But as others have pointed out, there are other fundamentally sound companies like Apple, Nvidia, Microsoft, etc. where DCA'ing into them will still produce decent gains. Again, keyword:
decent,
viable. No one here is arguing that DCA is the god method to produce the best outcome or even to
guarantee a profit.
So if you asked me if DCA is viable, yes. Is purely DCA is the best approach, perhaps not. Is blindly DCA'ing bad, yes. Is DCA just all downsides and no upsides, no. Do I want to get tied down in keeping up-to-date with the fundamentals of a hundred different companies, no. I also would like to go out and get laid, okay.
Ok lah, I think this particular discussion is like beating a dead horse. For me, I'll just end it here. Moral of the story, be careful when using DCA approach. Peace out.
P.S. Eh, you don't go out and get laid on a Sunday ka? So many long replies in a short span.
Jangan terasa ye, just cucuking.
QUOTE(dwRK @ Jun 26 2022, 01:31 PM)
it depends on my confidence wrt reading the price actions (green/red) and predicting next movements... if unsure, then i wait for confirmations to see how prices reacts at their support resistance levels...
i use moving averages and a few other indicators to help easily scan and assess... but i usually start with naked charts to reduce bias...then add in the indicators see what else i'm missing...
the 3rd entry is very good because of many factors... the dip preceding bounced a good level support, it bounce fibonacci retracement level, hit swing pattern failure, the bounce retraced back to a nice fibonacci level again, and a few more... this is a very technical entry with lots of good confirmation...
you can trade support and resistance levels, i.e., the tops and bottoms...these will give you maximum profits but also higher risks of getting things wrong, or trade the trend which is lower risk and less profit... but with trends need to make sure you get in and out early wrt the timeframe you are trading... usual risk is too late to the party and staying when its over...
I see. So your approach is akin to having a checklist of several items to indicate a good/bad entry point. Mainly:
1. Price actions
2. Support/resistance levels
3. Moving average
4. Fibonacci retracement levels
5. Reversal patterns.
Maybe I can read up on these and see if I can make heads and tails out of them.
QUOTE(dwRK @ Jun 26 2022, 01:31 PM)
for long term stock investing... daily and weekly charts with some basic ta indicators are good enough imho... the main problems with investors as i've mentioned before, is the reluctance to sell, inability to hedge and affinity to dca too early when the market starts tanking...
also fomo/buys in too early... your example 1st and 2nd entry... buy and hold 2 years without "making money" is not good use of funds... yes i know, i get it... buy tsla because you wanna own a piece of it...
anyways, dca in itself is not a bad thing... just be cognizant when to use it lor... anyways...
I resisted this time round to buy in too early, after the most recent Fed interest hike. Hopefully the market don't prove me wrong.
This post has been edited by RayleighH: Jun 26 2022, 02:03 PM