Often overlooked yet crucial investment and trading skills!

1. The Complexity of Cost Averaging

In the investment realm, cost averaging is not as intuitively simple as it seems. For instance, if you invest 10,000 U when the price is 10 U, and then add another 10,000 U when the price drops to 5 U, your average cost is not the intuitive 7.5 U, but 6.67 U. This calculation is particularly important in an environment where market prices fluctuate frequently. Correctly understanding and applying it can help you manage positions and control risks more effectively.

2. The Incredible Power of Compound Interest

Compound interest, this seemingly simple mathematical concept, actually holds tremendous growth potential. Suppose you have 100,000 U in capital and you only need to earn 1% per day to stop. Over 250 trading days in a year, if you can maintain such a return, your assets will grow to an astonishing 1,323,200 U after one year. If you continue for another two years, your assets might even exceed the ten million mark. Of course, this requires stable profitability, but more importantly, how to maintain this compound growth continuously is a challenge every investor must face.

3. Probability Management and Take-Profit/Stop-Loss

In trading, the setting of probabilities and take-profit/stop-loss points is equally crucial. Suppose your investment success rate is 60%, and you set a 10% take-profit and stop-loss point 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 when market volatility increases, you must maintain a clear mind.

4. Greed: The Biggest Pitfall on the Investment Path

Greed, this nearly insurmountable human flaw, is often the main reason for investment failure. Imagine starting with 10,000 U, earning a 10% profit each time, and by day 49 your assets could multiply a hundred times to reach 1,000,000 U, by day 73 it could break the ten million mark, and by day 97 it might even exceed one hundred million. However, the reality is harsh, as most people cannot control their greed in this process, ultimately leading to investment failure. Therefore, learning to control greed and maintaining a rational investment attitude is the key for every investor to succeed.