Four harsh truths about investing that can help you lose less money.
Averaging down is not simply 'average price'.
For example, if you bought 10,000 worth of coins at 10, and then bought another 10,000 when it dropped to 5. Do you think the average cost is 7.5? Wrong! The actual cost is 6.67, because the larger quantity bought the second time lowered the average price.
Key point: after averaging down, the cost is lower than you think, but don’t feel 'safe' because of this; you still need to stop loss when necessary.
Earn 1% daily, can you multiply it by 10 times in a year?
With a principal of 100,000, earning 1% daily, after 250 days in a year, compounded calculation can turn into 1.32 million.
But the reality is: very few people can consistently earn 1% every day; most people earn 5% today, lose 10% tomorrow, and end up with nothing. Discipline is more important than strategy.
Can a 60% success rate still make money?
If you trade 100 times:
60 profitable trades, earning 10% each → total profit of 60%.
40 losses, losing 10% each → total loss of 40%.
Ultimately net profit of 20%.
The problem is: most people run when they earn a little, hold on when they lose, and in the end, it’s pointless no matter how high the success rate.
From 10,000 to 100 million? Theoretically feasible, but don’t dream in reality.
Every time you earn 10%, winning 97 times in a row can achieve this.
But the reality is:
Feeling pleased after earning 10%, wanting to earn more, and as a result losing 20% on the next trade.
After continuous profits, the mindset inflates, and ultimately it goes to zero.
Investing is not a math problem, but a test of human nature.
Zhuque's personal view: the survival rule of the investment market—recognize the truth, uphold the bottom line.
About averaging down: low cost does not equal safety.
Averaging down can indeed reduce the average cost, but this is just a mathematical game. Many mistakenly believe that 'lower cost = safer' after averaging down, which makes them let their guard down, leading to deeper losses. My principle is: averaging down must set clear stop-loss levels, otherwise, it’s gambling.
About compound interest: the ideal is rich, but reality is stark.
Earning 1% daily sounds tempting, but in reality, the market is highly volatile, and emotional interference is severe. Very few can execute consistently. My advice is: give up unrealistic fantasies, focus on 'small profits and small losses, occasionally big gains'; long-term accumulation is the right way.
About winning rates: a 60% success rate can also lead to losses.
Even if the winning rate exceeds half, if the profit-loss ratio is unreasonable, the final result is still a loss. My strategy is: strict stop-loss, let profits run, only then can mathematical probabilities truly be on your side.
About getting rich quickly: from 10,000 to 100 million? Don’t be deceived by illusions.
Theoretically feasible, but in reality, 99% of people will lose control halfway—either taking profits too early or increasing losses, ultimately resulting in wasted efforts. My bottom line is: don’t pursue overnight wealth, only earn money that you understand, and preserving the principal is always the top priority. Want to know how to earn more money in the crypto world?
