Cold Knowledge and Skills in the Crypto World

In the crypto world, there are some cold knowledge or skills that are often unknown but are very important. Today, let's share a few:

1. Cost Averaging is Not as Simple as It Seems

For example, if you invest 10,000 U when a coin is priced at 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 a volatile market, and understanding this cost calculation method helps in managing positions.

2. The Power of Compound Interest is Amazing

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. If you continue for another two years, your assets could even reach tens of millions. Of course, this result is based on a stable rate of return, but the hidden challenge is how to sustain this compound interest.

3. The Relationship Between Probability and Take Profit/Stop Loss

If your investment success rate is 60%, and you set a 10% take profit and stop loss 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 emotionally affected by market fluctuations, especially staying 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 you could exceed 10 million U, and by the 97th day you might even surpass 100 million. However, in reality, almost no one can achieve this because most people cannot control their greed during this process, leading to failure along the way. This is why many traders find it difficult to maintain profits over the long term.