Pyramid Strategy
Scientific layered DCA strategy for Bitcoin, using pyramid buying method to reduce investment risks
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What is Pyramid Strategy?
Pyramid strategy is a layered buying investment method that sets different purchase amounts at different price ranges, forming a pyramid-like investment structure. The lower the price, the larger the purchase amount, effectively reducing average cost and improving investment returns.
Strategy Principles
1. Layered Setup
Divide investment funds into multiple tiers based on price ranges, with each tier corresponding to different purchase amounts.
2. Inverse Position Building
Increase purchase amount when prices fall, decrease when prices rise, operating contrary to market sentiment.
3. Cost Reduction
Effectively reduce average holding cost and increase profit margin by increasing purchases at lower price ranges.
Pyramid DCA Strategy Example
Based on the latest data, Bitcoin reached a new all-time high of $73,750.07 on March 14, 2024. Based on this new high, we formulate the following pyramid DCA strategy:
All-Time High: $73,750
Invest a portion of funds for every 10% drop, doubling the investment amount each time
| Price Drop | Trigger Price | Investment Shares |
|---|---|---|
| -10% | $66,375 | 1 share |
| -20% | $59,000 | 2 shares |
| -30% | $51,625 | 4 shares |
| -40% | $44,250 | 8 shares |
| -50% | $36,875 | 16 shares |
| -60% | $29,500 | 32 shares |
| -70% | $22,125 | 64 shares |
Strategy Rules:
- 📌New High Reset: If Bitcoin reaches a new high, recalculate prices based on the latest price and restart this strategy.
- 📌Range Fluctuation: If Bitcoin fluctuates within a certain price range for consecutive months, buy Bitcoin once per month on a fixed date according to the share amount for the current price level.
* The above data is based on the all-time high of March 14, 2024. Please adjust the share amount according to your own financial situation and risk tolerance when actually using it
Advantages
- ✓Effectively reduce average holding cost
- ✓Diversify investment risk
- ✓Overcome fear and greed emotions
- ✓Suitable for long-term investors
Considerations
- ⚠Requires strict fund management
- ⚠Does not guarantee profits
- ⚠Requires long-term commitment
- ⚠Need to adjust strategy based on market