In the cryptocurrency world, there are some little-known facts or tricks that are often overlooked but are very important. Today, let's share a few:

1. Cost dilution is not as simple as it seems

For example, if you invest 10,000 U when the price of a coin is 10 U, and then add another 10,000 U when the price drops to 5 U, your average cost is actually 6.67 U, not the 7.5 U that many people think. This situation is very common in market fluctuations, and understanding this cost calculation method is helpful for managing positions.

2. The power of compound interest is astonishing

Suppose you have 100,000 U and earn 1% daily before exiting. If you can maintain 250 trading days in a year, your assets will grow to 1,323,200 U after one year. Continuing for another two years, the assets could even reach the tens of millions level. Of course, this result is based on stable returns, but the hidden challenge is how to consistently maintain this compounding effect.

3. The relationship between probability and take-profit/take-loss

If your investment success rate is 60%, and you set a take-profit and take-loss at 10% each time, after 100 trades, your total return could reach 300%. But this premise is that you strictly follow your trading plan and are not influenced by market fluctuations, especially maintaining calm in highly volatile markets.

4. Greed is the biggest enemy

If you start with 10,000 U and earn 10% each time, by the 49th day, your assets could reach 1 million U, by the 73rd day, it could break 10 million U, and by the 97th day, there is a chance to exceed 100 million. However, in reality, almost no one can achieve this because most people cannot control their greed during the process, leading to failures along the way. This is why many traders, even when profitable, find it difficult to maintain their gains over the long term.

Contract trading and position management

In contract trading, position management and capital management are key factors determining success or failure. Many people use 20%-30% of their principal as the base position, but I personally prefer to use only 2%-5% and employ 20x leverage. This can effectively control risk and avoid emotional decision-making due to excessive fluctuations.