In the cryptocurrency space, there are some obscure knowledge or tips that may seem insignificant, but are actually quite important. Let's talk about a few today:

Cost averaging is not that simple

For example, if you invested 10,000 U when the price was 10 U, and later the price dropped to 5 U and you added another 10,000 U. At this point, your average cost is 6.67 U, not the 7.5 U that many people think. This situation is quite common in the market, and understanding this cost calculation is very helpful for managing positions.

The effect of compound interest is really quite scary

Suppose you have 100,000 U, and you earn 1% daily and stop. If you can persist for a year with 250 trading days, by the end of the year your assets could grow to 1,323,200 U. If you continue for another two years, your assets could exceed ten million. Of course, this is based on stable returns, and the challenge lies in how to maintain this compound growth.

Probability and stop-loss and take-profit strategies have their intricacies

Assuming you have a 60% chance of winning your investments, and you take profits after gaining 10% and stop losses after losing 10%. If you do this for 100 times, your total return could reach 300%. However, the premise is that you must strictly adhere to your trading plan and not be swayed by market fluctuations, especially during times of high volatility, you need to remain calm.

Greed is the biggest stumbling block

For instance, if you start with 10,000 U and earn 10% each time, after 49 days your assets could exceed one million, after 73 days over ten million, and after 97 days possibly over one billion. But in reality, very few people can achieve this because most cannot control their greed, ultimately leading to their downfall. This is also why many traders make money but cannot keep it.

Contract trading and position management

In contract trading, position and capital management are extremely important. Many people like to use 20%-30% of their capital to open positions, but I personally prefer to use only 2%-5% and then leverage it 20 times. This way, the risk is controllable and you won’t lose your composure due to large fluctuations.

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