In the crypto world, there are some lesser-known tips or tricks that are often ignored, but they are very important. Today I will share a few:
1. Cost dilution is not as simple as imagined
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% every day before exiting. If you can maintain 250 trading days in a year, then after a year your assets will grow to 1,323,200 U. Continuing for two years, your assets could even reach tens of millions. Of course, this result is based on a stable return rate, but the hidden challenge is how to continuously maintain this compound interest.
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 is that you strictly follow your trading plan and are not emotionally affected by market fluctuations, especially maintaining calm in a highly volatile market.
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 exceed 10 million U, and by the 97th day there is a chance to surpass 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 profitable.