In the cryptocurrency world, there are some little-known facts or techniques that are often overlooked but are very important. Today, I would like to share a few:

1. Cost averaging is not as simple as it seems.

For example, if you invest 10,000 U when a coin is priced at 10 U, and then add another 10,000 U when the coin price drops to 5 U, your average cost is actually 6.67 U, rather than the 7.5 U that many people believe. This situation is very common during market fluctuations, and understanding this cost calculation method can help with position management.

2. The compound interest effect is astonishing.

Assuming you have 100,000 U and earn 1% daily, you exit the market. If you can maintain 250 trading days in a year, your assets will grow to 1,323,200 U by the end of the year. If you continue for another two years, your assets could even reach the tens of millions. Of course, this result is based on a stable rate of return, but the hidden challenge is how to continuously maintain this compounding effect.

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%. However, this premise is that you strictly follow your trading plan and are not emotionally affected by market fluctuations, especially in high-volatility markets.

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, on the 73rd day, you could break through 10 million U, and by the 97th day, you might even exceed 100 million. However, in reality, almost no one can achieve this because most people cannot control their greed during the process, leading to failure along the way. This is why many traders find it difficult to maintain their profits 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 principal as the base position, but I personally prefer to only use 2%-5% and employ 20x leverage. This can effectively control risk and avoid emotional decisions caused by excessive volatility.

If you want to learn more about cryptocurrency knowledge and cutting-edge information, click on my profile and follow me. I share contract trading tips for free and provide daily points.