90% of people in the cryptocurrency world are blindly adding to their positions! An experienced investor will teach you how to calculate your true cost.
Four harsh truths about investing—read these to minimize your losses.
Adding to a position isn't simply about "averaging out the price."
For example, if you bought 10,000 worth of cryptocurrencies for 10 yuan, and then bought another 10,000 worth when the price dropped to 5 yuan, you'd think your cost was 7.5 yuan? Wrong! The actual cost was 6.67 yuan, because the second purchase was larger, lowering the average price.
Key Point: Your cost may be lower than you think after adding to your position, but don't feel "safe" because you should stop losses when necessary.
Earning 1% daily can multiply tenfold in a year.
With a 100,000 yuan investment, earning 1% daily, over 250 days a year, compound interest can turn it into 1.32 million yuan.
But the reality is: very few people can consistently earn 1% daily. Most people earn 5% today and lose 10% tomorrow, ultimately losing their money.
Discipline is more important than strategy.
Can you still make money with a 60% success rate?
Suppose you trade 100 times, with 60 profitable trades and 10% profit each time? - Total profit of 60%
40 losses, each 10% loss > total loss of 40%
Finally, a net profit of 20%
The problem is: most people run away after a small profit and stubbornly hold on to losses, ultimately making a high success rate useless
From 10,000 to 100 million? Theoretically possible, but don't dream of it in reality
Making a 10% profit each time and winning 97 times in a row will make it happen
But the reality is:
Making a 10% profit makes you complacent and wants to make more, only to end up losing 20% the next time
After consecutive profits, your mentality becomes inflated, and you end up losing nothing
Investing isn't a math problem, it's a test of human nature
Brother Chu's personal opinion: The rule of survival in the investment market is to recognize the truth
On covering your position: low cost * safety
Adding to a position can indeed reduce your average cost, but it's just a math game. Many People mistakenly believe that "lower costs = greater security" after adding to a position, leading them to relax their vigilance and sink deeper into the trap. My principle is: when adding to a position, you must set a clear stop-loss; otherwise, it's just gambling.
Regarding compound interest: Ideals are beautiful, but reality is harsh.
1% daily compound interest sounds tempting, but in reality, market volatility is volatile, and emotions can cause significant disruptions, making consistent execution rare.
My advice: abandon unrealistic fantasies and prioritize "small gains, small losses, and occasional large gains."
Long-term accumulation is the right path.
Regarding win rate: Even with a 660% success rate, you can still lose money.
Even if your win rate exceeds 50%, if your profit-loss ratio is unjustified, the end result will still be a loss.
My strategy: Strictly set stop-loss orders and let profits run their course.
This is how you can truly stand on your side.
