Dollar-Cost Averaging (DCA)
The practice of investing a fixed dollar amount into a specified security at regular intervals, regardless of the share price.
Systems Engineering Analogy
An automated cron job executing scheduled buy orders, automatically buying more units at discount valuations and fewer at peaks.
Mathematical SpecificationDeterministic
Average Cost = Total Dollars Invested / Total Shares PurchasedVariables:
Total Dollars:Cumulative fiat capital deployed across all purchase tranches
Total Shares:Aggregate units accumulated (weighted via harmonic mean price)
Featured in: Book 02: Buy the Average
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