4 trivia about the currency circle that may subvert some of your conventional understandings of cryptocurrency investment:
1. Weighted average cost method: If you invest 10,000 U when the price of a certain currency is 10U, and then invest another 10,000 U when it falls to 5U, your average cost will be 6.67U, not as commonly thought 7.5U. This is because you later buy the same quantity at a lower price than you did previously, thus significantly lowering the average cost.
2. The power of compound interest: Suppose you have 100,000 U. If you make a profit of 1% every day and leave the market at the end of the day, based on 250 trading days per year, your assets can grow to 1.3232 million U. after one year. This strategy exemplifies the power of the compounding effect, showing how small consecutive profits can add up to huge gains.
3. Investment probability and risk management: If your investment success rate is 60%, and you set the take-profit and stop-loss for each investment to be 10%, then after 100 consecutive investments, the theoretical overall rate of return will reach 300%. This model emphasizes the importance of setting reasonable stop loss and take profit points to maintain profitability in the long term.
4. The unsustainability of exponential growth: Although theoretically if you enter the market with 10,000 U and make a profit of 10% every day, you can grow your funds to more than 100 million U in less than 100 days, in fact this High growth is difficult to achieve and unsustainable. Market uncertainty and investor psychological factors (such as greed) often hinder the realization of this ideal state.
