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

1. Cost averaging is not as simple as it seems

For example, if you invest 10,000 U when a cryptocurrency is priced at 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 assume. This situation is very common during market fluctuations, and understanding this cost calculation method is helpful for managing positions.

2. The compounding effect is astonishing

Assuming you have 100,000 U and earn 1% daily, if you can maintain this for 250 trading days in a year, your assets will grow to 1.3232 million U after one year. Continuing for two more 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 profit-taking/stop-loss

If your investment success rate is 60% and you set a 10% profit-taking and stop-loss for each trade, after 100 trades, your total return could reach 300%. However, this premise is contingent on strictly following your trading plan and not letting market fluctuations affect your emotions, especially staying calm in highly volatile markets.

4. Greed is the biggest enemy

If you start with 10,000 U and make 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, as most people cannot control their greed during this process, leading to setbacks. This is why many traders, despite being profitable, find it hard to maintain their success over the long term.

Contract trading and position management

In contract trading, position management and capital management are key to success or failure. Many people use 20%-30% of their capital as their base position, but personally, I prefer to use only 2%-5% and employ 20x leverage. This effectively controls risk and avoids emotional decisions due to excessive volatility.