Often overlooked yet critically important investment and trading skills!

1. The Complexity of Cost Averaging

In the investment field, cost averaging is not as straightforward as it seems. For example, if you invest $10,000 when the price of a coin is $10, and then add another $10,000 when the price drops to $5, your average cost is not the intuitive $7.5, but rather $6.67. This method of calculation is particularly important in an environment of frequent market price fluctuations; understanding and applying it correctly can help you manage positions and control risk more effectively.

2. The Astonishing Power of Compound Interest

Compound interest, this seemingly simple mathematical concept, actually contains tremendous growth potential. Assume you have $100,000 in funds and aim to earn just 1% daily. Over 250 trading days in a year, if you can consistently maintain this return, your assets will grow to an astonishing $1,323,200 after one year. If you continue for another two years, your assets might even exceed ten million. Of course, this requires stable profitability, but more importantly, how to continuously maintain this compounding growth is a challenge that every investor must face.

3. Probability Management and Take Profit/Stop Loss

In trading, probability management and setting take profit/stop loss points are equally crucial. Suppose your investment success rate is 60%, and you set a 10% take profit and stop loss for each trade. In 100 trades, if you can strictly adhere to this strategy without being swayed by market fluctuations, your total return could reach 300%. However, this requires a high degree of self-discipline and calm judgment, especially during periods of increased market volatility, when it is even more necessary to maintain a clear mind.

4. Greed: The Biggest Stumbling Block on the Investment Path

Greed, this difficult-to-overcome weakness of human nature, is often the primary cause of investment failure. Imagine starting with $10,000 and earning a 10% profit each time; by the 49th day, your assets could multiply a hundredfold to reach $1,000,000, breaking the ten million mark by the 73rd day, and even potentially exceeding one hundred million by the 97th day. However, the reality is harsh, as most people cannot restrain their greed during this process, ultimately leading to investment failure. Therefore, learning to control greed and maintaining a rational investment attitude is key for every investor on the path to success.