Organized the cryptocurrency trading logic of Teacher Chuanmu

The essence of trading cryptocurrency — using probability and combination management to achieve stable profits

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1. Trading cryptocurrency is not about luck, but about playing with 'mathematical expectation'

• If you initially analyze and calculate that:

• Every 10 yuan invested can bring an average profit of 13 yuan

• Then the mathematical expectation (E) of this transaction = +3

• The problem is:

• Single transaction volatility is too large: you might earn more or lose everything

• So, it's hard to get close to that expected value of '13 yuan' in a single transaction

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2. How to stabilize the approach to the expected value? — Rely on the 'Law of Large Numbers'

• According to the Law of Large Numbers: as the number of trials approaches infinity, the actual average will almost certainly converge to the expected value

• In other words:

• If you keep repeating trades, after a sufficient number of samples

• The actual results will infinitely approach your set mathematical expectation (13 yuan)

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3. How to apply it practically? — Build a trading 'portfolio'

• Instead of betting heavily on one coin at once, it's better to construct a portfolio of trades

• For example:

• When shorting, select 10-20 small market cap coins that are turning bearish

• When going long, select 10-50 logically consistent rising coins

• Key points of portfolio trading:

• Total investment amount is consistent (still that 10 yuan)

• Each coin shares the position (for example, 10 coins, each 1 yuan)

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4. What are the benefits?

• Risk is more diversified: no longer dragged down by the volatility of a single coin affecting the entire profit

• Profits are more stable: due to the stability of the portfolio average, it's easier to approach the expected value

• Execution is more rational: trading shifts from 'betting on direction' to 'running a probability model'

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5. In summary:

The ultimate way to trade cryptocurrency is to use probability thinking + portfolio management to realize your mathematical expectation.