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For example, if you buy $500 worth of bitcoins, you can divide it into five parts. If you buy dip then you can definitely save a lot of money. This is where your average will control the price, because adding your high price and low price to the normal price will come up with the purchase price of your Bitcoin price. So if you buy bitcoins in few steps you can definitely save the most on buying bitcoins and holding it for a long time is safest.
There is hardly any way to know if you are going to save money by splitting up your payment - however, you can spread out your own cashflow management if you are not sure about it, and also spread out your BTC buys if you are not sure about it, yet you are not going to save any money if you start to buy by splitting up your payment, and then the price continues to go up during the period that you are making each of your subsequent payments. In the case of the BTC price going up, you might have had been better off just buying the whole $500 at once, yet you do not know which way the BTC price is going to go.. and another part of tends to be that you might not be sure if you are going to have all of the $500 or that you are in a position to spend all of the $500 at once, even if you have it... so yeah, spreading it out does have the potential benefit of the BTC price going down, yet surely the BTC price is not necessarily going to go down.... so you have to make the calculation based on factors other than your believing that you know which way the BTC price is going to go... which more likely would be based on your own personal cashflow circumstances including income and expenses and perhaps even some of the inconsistencies that might relate to your own financial and/or psychological circumstances.
You're absolutely correct, the market can be very interestingly complex and dynamic. There's every possibility of losses when choose to split up your payments, making you see reasons why you should've just invested the whole $500.
Inasmuch as the. DCA strategy is quite and outstanding and effective strategy it's still doesn't necessarily guarantee savings, especially when the market price keeps rising during the time for your subsequent buys.
But nonetheless, it could still prove to be quite a viable option that's comes pretty much in handy when it comes to managing one's cashflow as well as reducing the impact and effect of the volatility of the market on you.
But whatever technique one decides on using, they should always put in consideration their financial circumstance, like expenses, income flow and also psychological factors too.