In the process of cryptocurrency trading, it took me four years to understand a key truth. Have you ever carefully calculated the account of cryptocurrency trading and understood the mystery?
Imagine that if you hold 1 million yuan in your hand, it first rises by 100%, then falls by 50%. How much will you have left in the end? Surprisingly, the answer is 1 million yuan! Look again, if it falls by 50% first and then rises by 50%, how much money will you have? The answer is also 750,000 yuan! Even if it rises by 50% first and then falls by 50%, the result is still 750,000 yuan.
What do these two examples reveal to us? They show that in the process of cryptocurrency trading, controlling retracement is the top priority. Many people may be able to make high profits in the short term, but as long as the retracement exceeds 50%, the final outcome will still return to the starting point, and everything will be in vain. Such efforts are really in vain!
And what message does the other example convey to us? It tells us that a stable annualized rate of return is not inferior to a high rate of return with greater volatility. Maintaining a steady 30% return every year is already quite outstanding! If you can maintain this growth every year and let compound interest take effect, the returns will be very considerable over time!
From the perspective of the stock market master Buffett, the reason why he became the stock god is not because he can easily double his money in the short term, but because he has maintained a profit of more than 20% in the long years of 47 years. There are very few people who can maintain profits for a long time. Therefore, we should have a normal heart, be down-to-earth, and believe in the powerful power of compound interest.
In the journey of currency speculation, it is necessary to do a good job of position management. Only by making prudent choices and controlling risks can we move forward steadily and obtain more generous returns. Let us stick to a stable investment strategy, believe in ourselves, and pursue long-term and stable wealth growth!