1. The Law of Asymmetric Profit and Loss
1,000,000 doubles to 2,000,000 (+100%), but losing 50% brings it back to the starting point.
Truth: Profit takes time, while losses only require a moment.
Countermeasure: Take profits in batches after gains, and enforce a stop-loss if losses exceed 20%.
2. The Trap of Price Movement Order
1,000,000 first rises by 10% and then falls by 10% = 990,000 (and vice versa).
Truth: Market fluctuations will naturally erode principal.
Countermeasure: Avoid frequent trading to reduce friction costs.
3. Volatility Devours Returns
1,000,000 experiences a cycle of "+40%, -20%" for 6 years → 1,405,000, with an annualized return of only 5.83%.
Truth: Under high volatility, returns will be significantly offset by drawdowns.
Countermeasure: Control positions in bear markets, let profits run in bull markets.
4. The Truth About the Myth of Compound Interest
1,000,000 earning 1% daily, after 250 days → 12,030,000, after 500 days → 145 million.
Trap: No one can consistently earn 1% daily, but losing 20% in a day is very common.
Countermeasure: Pursue reasonable compound interest (30% annualized is already top-tier).
5. Excessive Profits Are Unsustainable
1,000,000 continuously earning 200% for 5 years → 243 million.
Reality: 99.9% of people in the crypto space cannot sustain high returns for 3 years.
Countermeasure: Withdraw at least 50% of the profits earned in a bull market to lock in gains during a bear market.
6. The Harsh Mathematics of Long-Term Goals
1,000,000 turning into 1 billion requires 30 years of sustained 25.89% annualized return.
Truth: Buffett's annualized return is only 20%, don't be brainwashed by "1000x coins."
Countermeasure: Invest with spare money, use time to exchange for space.
7. The Art of Averaging Down
Buy 10,000 for 10 yuan, drop to 5 yuan and buy 10,000 more → cost is 6.67 yuan (not 7.5 yuan).
Key: Averaging down should widen the price gap (at least drop 30% before averaging down).
Taboo: Do not shoot all your bullets at once.
8. Zero-Cost Holding Strategy
After 10% profit on 1,000,000, sell 900,000 and keep 100,000 chips → cost basis becomes zero.
Advanced: If you keep 200,000 chips, only a 50% drop will result in a loss.
Essence: Gamble with profits, principal is always safe.
9. All-Weather Allocation Strategy
800,000 buys stablecoins (5% annualized) + 200,000 invests in high-risk coins.
Result: At worst, break even; at best, annual return of 12%.
Upgraded Version: Increase risk ratio in bull markets, switch to stablecoin investments in bear markets.
