A must-read for beginners in cryptocurrency trading! It will help you avoid detours, so hurry up and save it!!
One, about earnings
Assuming you have 1,000,000, when the profit reaches 100%, your assets will reach 2,000,000. If you then lose 50%, it means your assets will return to 1,000,000. Obviously, losing 50% is much easier than gaining 100%.
Two, about price fluctuations
If you have 1,000,000, after a 10% increase on the first day, your assets will reach 1,100,000, and then after a 10% decrease on the second day, your assets will remain at 990,000. Conversely, if you decrease by 10% on the first day and increase by 10% on the second day, your assets will still be 990,000.
Three, about volatility
If you have 1,000,000, earn 40% in the first year, lose 20% in the second year, earn 40% in the third year, lose 20% in the fourth year, earn 40% in the fifth year, and lose 20% in the sixth year, your assets will be 1,405,000, with a six-year annualized yield of only 5.83%, which is even lower than the face interest rate of a five-year treasury bond.
Four, about 1% each day
If you have 1,000,000, if you can earn 1% each day and exit, then after 250 days, your assets can reach 12,032,000, and after 500 days your assets will reach 145 million.
Five, about 200% each year
If you have 1,000,000 and achieve a 200% return continuously for 5 years, after 5 years your assets will reach 243 million, but such high returns are very difficult to sustain.
Six, about tenfold in ten years
If you have 1,000,000 and hope to reach 10,000,000 in ten years, 100,000,000 in twenty years, and 1,000,000,000 in thirty years, then you need to achieve an annualized return of 25.89.
Seven, about averaging down
Assuming you bought a cryptocurrency for 10 yuan with 10,000 yuan, and now it has dropped to 5 yuan, when you buy another 10,000 yuan, the cost you hold can be reduced to 6.67 yuan, not the 7.5 yuan you imagined.
Eight, about holding costs
If you have 1,000,000 and invest in a certain cryptocurrency with a profit of 10%, when you decide to sell, you can leave 100,000 in market value tokens, then your holding cost will be zero, and you can hold long-term without pressure. If you are extremely optimistic about this cryptocurrency and leave 200,000 in market value tokens, you will find that your profit will rise from 10% to 100%, but do not be complacent, because if this cryptocurrency drops by 50% later, you may still incur losses.
The cryptocurrency market is full of uncertainty and challenges, but it also contains potential opportunities. Investors should fully understand the associated risks when participating in cryptocurrency investments, remain calm and rational, and respond to market changes with a prudent strategy! Make friends widely!