The DCA illusion
Dollar-cost averaging spreads buys over time so your average entry sits below a falling price. That feels like winning — but a lower average is not profit, it is a lower break-even. The only honest number is the realized P/L: what you would actually bank if you sold right now (current value − total invested). Averaging down can make sense, but know the difference between "my average looks good" and "I made money." Then size new buys with the position size calculator.
DCA math people get wrong
Dollar-cost averaging lowers your average entry when price drops — that part everyone knows. What's less obvious: your average only falls by half the drop if you buy equal amounts each time. Buy $100 at $100 and $100 at $50, average is $67, not $75. You now need a 34% recovery to break even, not a 50% bounce back to $100.
The break-even price is total_invested ÷ total_units. This calculator shows it directly. What it also shows: if you've bought 10 times into a falling asset, your break-even might be nowhere near current price — and adding more pushes it down only slightly each time.
DCA works best with fixed schedules into assets you'd hold indefinitely anyway. Using it to average into a leveraged futures position is a different thing entirely and usually ends in a larger loss at the same liquidation price.
Related: average down calculator, lump sum vs DCA, DCA exit planner.