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We make bad decisions in trading. This method saves you from losing everything. Losing everything may be worse because you may have no means to get your money back but you only lose a little amount if you and have your other part of them money. And when you get profit you can double it by adding using the other divided small amounts. Instead of demo for a long time these small amounts can be used to protect from the loss that may be encountered during that first time.
Having a proper plan before investing or trading is recommended, I think it can save them from total loss due to price volatility. Everyone's investment and trading strategy may be different, but they all have the same hope and that is to make a profit. The approach you suggested is useful, I think it is a way to minimize total loss although DCA can also help.
There are some good methods or strategies for traders and investors, they can learn them all the time and maybe develop them. Accumulating small capital into bigger is the goal, meaning that every profit should not be withdrawn and they only need to double their capital.