In the cryptocurrency world, there are some little-known facts or tips that are often overlooked, but are extremely important. Today, I will share a few:

1. Cost dilution is not as simple as it seems

For example, if you invest 10,000 U when the coin price 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 a volatile market, and understanding this cost calculation method is helpful for managing positions.

2. The compound interest effect is astonishing

Assuming you have 100,000 U, and you earn 1% daily before exiting. If you can maintain this over 250 trading days in a year, your assets will grow to 1,323,200 U after one year. Continuing for two years, your 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 a highly volatile market.

4. Greed is the biggest 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 the process, leading to failures along the way. This is why many traders find it difficult to maintain profits over the long term, even if they are making money.

Contract trading and position management

In contract trading, position management and capital management are the key determinants of success or failure. Many people use 20%-30% of their capital as the base position, but I personally prefer to only use 2%-5%, employing 20x leverage. This effectively controls risk and avoids emotional decision-making caused by excessive fluctuations. $BTC $ETH #“圣诞老人行情”再现 #萨尔瓦多将“加速”增持BTC #本周微策略是否继续增持BTC？