Often unknown, but extremely important skills!!
1. Cost averaging is not as simple as it seems
For example, if you invest 10,000 U when the price of a coin is 10 U, and then add another 10,000 U when the price drops to 5 U, your average cost is actually 6.67 U, not the 7.5 U that many people think. This situation is very common in market fluctuations, and understanding this cost calculation method helps in managing positions.
2. The power of compound interest is astonishing
Assuming you have 100,000 U and earn 1% daily before exiting. If you can maintain 250 trading days in a year, your assets will grow to 1,323,200 U after one year. Continuing for another two years, the assets could even reach tens of millions. Of course, this result is based on stable returns, but the hidden challenge is how to continuously maintain this compounding.
3. The relationship between probability and take profit/stop loss
If your investment success rate is 60%, and you set a 10% take profit and stop loss each time, after 100 trades, your total return could reach 300%. But this premise relies on strictly following your trading plan, not letting market fluctuations affect your emotions, especially staying calm in high-volatility markets.
4. Greed is the greatest enemy
If you start with 10,000 U and earn 10% each time, by the 49th day your assets could reach 1 million U, by the 73rd day it could surpass 10 million U, and by the 97th day there’s a chance to exceed 100 million. However, in reality, almost no one can achieve this because most people cannot control their greed during this process, leading to a breakdown along the way. This is why many traders find it difficult to maintain profits in the long term.