Four cruel truths about investing, knowing them can help you lose less money.

  1. Averaging down is not just a simple 'average price.'

    For example, if you buy 10 yuan worth of coins for 10,000 yuan, and it drops to 5 yuan and you buy another 10,000 yuan. Do you think the cost is 7.5 yuan? Wrong! The actual cost is 6.67 yuan, because the second purchase quantity was more, lowering the average price.

    Key point: After averaging down, the cost is lower than you think, but don’t feel 'safe' because of it; you still need to cut losses when necessary.

  2. Earn 1% every day, can you multiply your investment by 10 times in a year?

    With a capital of 100,000, if you earn 1% daily for 250 days a year, it can grow to 1.32 million with compound interest.

    But the reality is: very few people can consistently earn 1% every day; most earn 5% today, lose 10% tomorrow, and ultimately end up with nothing. Self-discipline is more important than strategy.

  3. Can a success rate of 60% still make money?

    If you trade 100 times:

    • 60 profitable trades, each earning 10% → Total profit of 60%

    • 40 losing trades, each losing 10% → Total loss of 40%

      Ultimately, a net profit of 20%.

      The problem is: most people run as soon as they make a little profit, but stubbornly hold on when losing, rendering even a high success rate useless.

  4. From 10,000 to 100 million? Theoretically possible, but don't dream about it in reality.

    Earn 10% each time, and winning 97 times in a row can achieve that.

    But the reality is:

    • Earn 10% and feel proud, wanting to earn more, only to lose 20% on the next bet.

    • After consecutive profits, the mindset inflates, ultimately leading to a total loss.

      Investment is not a math problem, but a test of human nature.

Summary:

When averaging down, calculate the real cost, but don't rely on it to 'break even.'

Compound interest is beautiful, but first achieve 'stable profits' before talking about it.

Taking profits and cutting losses is more important than guessing price movements.

Don't fantasize about getting rich quickly; being able to survive in the market is winning.

Remember: the secret to making money is not 'being smarter', but 'being more restrained.'

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