Let’s say you have 5k in statized currency and you want to buy some Bitcoin. Instead of just straight up buying everything now, it can be much better to buy 1k now, 1k next week, 1k in two weeks, and so on, until you buy everything you want.
The problem with buying everything upfront is that it can go up a lot after you buy it, or it can fall/dip and you’ll lose money. The risk is quite high.
If you instead buy slowly, some of your buys will be on highs, while some of your buys will be on lows. The gains you’ll get from the low buys will more or less cancel the losses from the high buys, and you’ll end up with a smaller standard deviation. You’ll probably gain less, but also risk losing less.
Many of you probably already know this, but some don’t, thus it’s still [good to emphasize it](https://xkcd.com/1053/).
Also, the same can be said for selling. Selling slowly may also be better than selling everything upfront.
View Reddit by Acalme-se_Satan – View Source