Volatility

How much and how fast prices move.

Volatility describes how sharply an investment's price swings up and down. More volatility means a bumpier ride.

Volatility and DCA

Volatility is uncomfortable, but it is also what makes dollar-cost averaging effective: big swings mean your fixed amount buys many more shares at the lows.

Bitcoin is a good example. It has fallen by more than 70% from a peak more than once, then gone on to new highs. Steady buyers rode the swings instead of trying to dodge them.

Try it with real numbers Bitcoin DCA calculator Monthly buys since 2015 Open the calculator