There are some little-known knowledge or skills in the cryptocurrency circle, but they are very important. Let me talk about a few:

1. Cost dilution is not as simple as imagined

For example, if you invest 10,000 U when the price of a certain coin is 10U, and then add another 10,000 U when the price drops to 5U, your average cost is actually 6.67U, not 7.5U as many people think. This situation is very common in market fluctuations, and understanding this cost calculation method is helpful for managing positions.

2. Compound interest effect

Suppose you have 100,000 U and exit when you make 1% every day. If you can maintain 250 trading days a year, your assets will grow to 1.3232 million U in one year. Continue for two years, and the assets can even reach the 10 million level. Of course, this result is based on a stable rate of return, but the hidden challenge behind it is how to continue to maintain this compound interest.

3. The relationship between probability and stop profit and stop loss

If your investment success rate is 60%, and you set a 10% stop profit and stop loss each time, after 100 transactions, your total rate of return can reach 300%. But this premise is that you strictly follow your trading plan and are not affected by market fluctuations, especially in a high-volatility market.

4. Greed is the biggest enemy

If you start with 10,000 U and earn 10% each time, your assets will reach 1 million U on the 49th day, and you can break through 10 million U on the 73rd day, and you have a chance to exceed 100 million on the 97th day. However, in reality, almost no one can achieve it, because most people cannot control their greed in the process, resulting in a rollover. This is why many traders find it difficult to maintain their profits for a long time even if they make profits.

5. Contract trading and position management

In contract trading, position management and capital management are the key to success or failure. Many people use 20%-30% of the principal as the basic position, but I personally prefer to use only 2%-5% and use 20 times leverage. This can effectively control risks and avoid emotional decisions caused by excessive fluctuations. $BTC $ETH $BNB