Often overlooked yet crucial investment and trading skills!

1. The complexity of cost averaging

In the field of investment, cost averaging is not as straightforward as it seems. For example, when the coin price is at $10 and you invest $10,000, then when the price drops to $5 and you add another $10,000, your average cost is not intuitively $7.5, but rather $6.67. This calculation method is especially important in an environment where market prices fluctuate frequently. Understanding and applying it correctly can help you manage positions and control risks more effectively.

2. The astonishing power of compound interest

Compound interest, a seemingly simple mathematical concept, actually contains tremendous growth potential. Suppose you have $100,000 in funds and only need to earn 1% daily. Over a year of 250 trading days, if you can maintain this rate of return, your assets will grow to an astonishing $1,323,200 after one year. If you continue for two more years, your assets may even exceed $10 million. Of course, this requires stable profitability, but more importantly, how to continuously maintain this compound growth is a challenge that every investor must face.

3. Probability management and take-profit stop-loss

In trading, the setting of probability and take-profit stop-loss is also crucial. Suppose your investment success rate is 60%, and each trade sets a 10% take-profit and stop-loss point. In 100 trades, if you strictly follow this strategy and are not swayed by market fluctuations, your total return rate is expected to reach 300%. However, this requires a high level of self-discipline and calm judgment, especially when market volatility increases, you must maintain a clear mind.

4. Greed: The biggest stumbling block on the investment road

Greed, this human weakness that is difficult to overcome, is often the main reason for investment failure. Imagine starting with $10,000, earning 10% profit each time; by the 49th day, your assets could multiply by a hundred to reach $1 million, by the 73rd day it could break the $10 million mark, and by the 97th day it could even exceed $100 million. 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.