Dear readers, it is important to understand the concept of DYOR & DCA before investing as they are crucial processes to aid profitability.

I will split this content into the following parts.

1). Introduction (DYOR & DCA).

2). How to:

1. DYOR

2.DCA.

1.Introduction:

DYOR is an acronym that stands for "DO YOUR OWN RESEARCH". This simply means doing one's research about a certain project before investing. The research process includes going through projects,tokenomics, social media presence, white paper and lots more.

DCA is an acronym that stands for "DOLLAR COST AVERAGING" This is an investment strategy which involves splitting capital to buy a certain asset at different price ranges.

2.1

How to DYOR

There are informations everywhere in the general crypto space some maybe good and some not

accurate, different players have different sentiments but DYOR is what makes a player a key player.

Here are some important checklists for doing research.

1.Project's Website:

A project website is the most important place to start research. It usually contains the top vital information about a project which are the main things. The quality and originality of the website and how well it is documented.

2.Team/Partnership:

A project team also matters, the team behind a project and reputation in the space is actually something to check for and also the partnership maybe the project has the support of a reputable brand

3.Tokenomics:

This describes the total amount of a specific good or service that is available to consumers. Essentially this implies the total availability of a resource to satisfy demand.

Metrics can be gather about a token when it is listed on reputable site like COINGECKO or COIN MARKET CAP.

Using metrics like:

-Total supply: Maximum amount of the tokens created

-Circulating Supply: The amount of the tokens currently available for trading

-Vesting: The amount of token Locked for vesting

-Burning: A mechanism to reduce an amount of supply permanently

-Market Cap: coin of price × circulating supply (this helps in predicting the possible outcome of ROI)

-Volume: Amount being traded within a timeframe

4.Utility: This is simply the use case of a token (project). The use case is the problem the project aims to solve although some projects doesn't have a specific use case (e.g meme coins) choosing to invest in a project that has use case is generally rewarding.

5.Roadmap: These are milestones a project aims to achieve over a particular period of time. The roadmap of a project is usually found in a document (usually on the project's website.) called the WHITEPAPER -document that contains information about the project's tokenomics, how it's built and other roadmaps

6. Social Media: The social media presence of a project is also something to look out for. The quality and originality should be vetted. The accounts creation page, The number and type of audience and lots more

7.On-chain Analysis: On-chain Analysis is simply making research about wallets relating to a particular project on the blockchain and the wallet deploying the project in the blockchain.

And here is a list of important stats I use for my On-chain Analysis.

-No wallet should hold more than 25% of the token- depending on the project's reputation.

- 25% of tokens shouldn't be held by the top 10 wallets, it should be at least top 100.

-Contract must be renounced

-Pass the token sniffer and honeypot (website that allows you to screen a project's contract address).

2.2

How to DCA

Your ability to understand price levels of a project and invest in them at different levels makes you "profitable". You can either make Ur DCA process randomly or do it the RIGHT way, either is smart but I will be delving deeper into the RIGHT way.

Buying assets randomly could be profitable especially when you make it a timeframe (weekly). But to do it the RIGHT way we have to put some things into Considerations which will be highlighted below.

How to DCA the RIGHT way!

Technical Analysis (Resistance and Support) and Market Trends.

Technical Analysis (Resistance and Support):

This is the process of using chart patterns in market data to identify trends and make predictions.

The 2 most important factors in chart readings are called the 'SUPPORT' and 'RESISTANCE'.

SUPPORT is a chart level at which an asset price tends to find demand pressure strong enough to stall and/or reverse its price in the event of a downtrend while RESISTANCE is the opposite. When the price reaches a resistance, it means that the buyers are less keen to buy the asset at the current price level.

Market Trends:

Uptrend And Downtrend

Uptrend is when an asset price continues to move above the previous high to for a highery high.

While Downtrend is when an asset price continues to move below previous low to form a lower low.

Depending on the market trend which is (uptrend or downtrend) support and resistance level interswitch.

In context:

Uptrend

In an uptrend (market condition whereby price moves up and creates higher highs).

It is always safe to make a support level a point of entry, because the price movement will tend to break a new resistance level and not go below the current support level (point of entry) which subsequently makes the investment profitable as the trend continues and entry shifts to new supports.

Downtrend:

In a downtrend we do direct opposite of what we did in the uptrend- by making our point of entry every resistance point.

These processes are proven guidelines and processes to help us make better investment decisions and be more profitable.

And yes while taking profits too, it is good to use DCA taking profits at different levels in an uptrend.

CASE STUDY ON USING DCA WITH TIME RANGE:

If OBI decides to buy $50 worth of SOLANA(sol) weekly from Now until January, with approximately 6wks left in 2023. Let’s say

Week I – SOL at $45, he buys $50 worth which is 1.11sol

Week II: SOL at $43, he buys $50 worth which is 1.16sol

Week III: SOL at $41, he buys $50 worth which is 1.122sol

Week IV: SOL at $48, he buys $50 worth which is 1.04sol

Week V: SOL at $45, he buys $50 worth which is 1.11sol

Week VI: SOL at $51, he buys $50 worth which is 0.98sol

So this means OBI has spent $300 to purchase 6.522sol in the last 6 weeks prior to January where the current price is $333.

To determine the average entry price, we add all his purchase prices from week 1 through Week 6 and divide by the total number of weeks so far which equals $273.

So OBI is currently in possession of 6.522sol purchased at $273.

To determine this at any point in time is to multiply his current SOL holdings by the market price, which in this case, is $333 Hence, he has made a profit of $33 thus far, even as volatility took place in the sample period of 6wks. In the event of an Uptrend.

If at downtrend, you’d be able to know if there’s a loss, breakeven or profit by same calculation;

Asset holding X Market Price

NOTE:

The dip in weeks II, III & V was a good one for him. That's the awesomness of DCA!