4 cruel truths about investing, knowing them can help you lose less money.
Averaging down is not a simple 'average price'.
For example, if you buy 10,000 worth of coins at 10, and then buy another 10,000 when it drops to 5. Do you think the cost is 7.5? Wrong! The actual cost is 6.67 because the second purchase quantity is greater, pulling down the average price.
Key point: After averaging down, the cost is lower than you think, but don't feel 'safe' because of it; stop-loss must still be enforced.
Can earning 1% daily turn into 10 times in a year?
With a principal of 100,000, earning 1% daily, after 250 days in a year, compounded, it can turn into 1.32 million.
But the reality is: very few can consistently earn 1% daily; most earn 5% today and lose 10% tomorrow, ending up with nothing. Discipline is more important than strategy.
Can a 60% success rate still make money?
Suppose you trade 100 times:
60 wins, earning 10% each time → Total profit 60%.
40 losses, losing 10% each time → Total loss 40%.
Ultimately a net profit of 20%.
The problem is: most people run after making a little profit and stubbornly hold on to losses; in the end, no matter how high the success rate, it's all in vain.
From 10,000 to 100 million? Theoretically feasible, but don't dream in reality.
Earn 10% each time, win 97 times in a row to achieve it.
But the reality is:
Feeling pleased after earning 10%, wanting to earn more, only to lose 20% next time.
After continuous profits, an inflated mindset leads to losing everything in the end.
Investment is not a math problem, but a test of human nature.
Personal view of Zhuque: The survival rule of the investment market - Recognize the truth, maintain the bottom line.
About averaging down: Low cost ≠ safe.
Averaging down can indeed lower the average cost, but it's just a mathematical game. Many mistakenly believe that 'lower cost = safer' after averaging down, and they let their guard down, leading to deeper losses. My principle is: averaging down must have a clear stop-loss point, otherwise it's gambling.
About compound interest: Ideals are abundant, but reality is stark.
1% daily compound interest sounds tempting, but in reality, market volatility is severe and emotional interference is intense; very few can execute it steadily. My advice is: give up unrealistic fantasies, first achieve 'small gains and small losses, occasionally big profits,' long-term accumulation is the right path.
About win rate: A 60% success rate can still lead to losses.
Even if the win rate exceeds half, if the risk-reward ratio is unreasonable, the final result will still be a loss. My strategy is: strict stop-loss, let profits run, only then can the mathematical probability truly stand 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 midway - either taking profits too early or increasing losses, ultimately empty-handed. My bottom line is: do not pursue overnight riches, only earn money you understand, preserving capital is always the top priority. Want to know how to make more money in the crypto space? Come find me, I’ll guide you aboard.
Summary:
When averaging down, calculate the real cost clearly, but don't rely on it to 'unwind'.
Compound interest is beautiful, but first achieve 'stable profits' before anything else.
Taking profits and cutting losses is more important than 'guessing price movements'.
Don't fantasize about getting rich quickly; the real winners are those who can survive in the market.
Remember: the secret to making money is not being 'smarter', but being 'more restrained'.
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