There are some seemingly trivial little pieces of knowledge in the crypto world that often determine the success or failure of a trade. Today, let's discuss a few truly practical but easily overlooked techniques.
**The Arithmetic of Cost Averaging**
Many people have misconceptions about this operation. For example, investing 10,000 USDT when a coin is at 10 USDT, then adding another 10,000 USDT when it drops to 5 USDT. The average cost at this point is 6.67 USDT, not 7.5 USDT. This difference may seem small, but it can significantly impact position management with large positions. Understanding this algorithm thoroughly greatly influences subsequent exit strategies.
**The Power of Compound Interest**
Suppose you have 100,000 USDT, and you earn a steady 1% daily profit. By the end of the year with 250 trading days, your assets grow to 1,323,200 USDT. Over the next two years, the account size can directly surpass the 10 million level. Of course, all this depends on consistent and stable returns—which is the sticking point for most people.
**Probability and the Coordination of Take Profit and Stop Loss**
Assuming a strategy has a 60% win rate, with each profit target set at 10%. The key is that different stop-loss levels directly affect the expected return. Setting it too loose can wipe out multiple wins with a single drawdown; setting it too tight can lead to being stopped out prematurely. Finding this balance is the true trading framework.
Those who can consistently profit in the market are often not relying on highly accurate predictions, but rather mastering these fundamental principles and repeatedly refining them through practical experience.
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ReverseTradingGuru
· 01-12 20:54
The idea of compound interest sounds great, but in reality, most people can't even reliably earn 1%, let alone reach the million-level scale.
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DecentralizedElder
· 01-12 20:53
The point about compound interest is correct, but among ten people who can truly stick to 1%, it's hard to find one. I've seen too many people who are stable in the beginning but then go all-in directly afterward.
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DAOdreamer
· 01-12 20:48
The explanation of compound interest is excellent, but to be honest, consistently earning 1% daily is even harder than winning the lottery. I've never seen someone like that.
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rekt_but_resilient
· 01-12 20:41
Wow, that compound interest part is really amazing. Earning 1% daily sounds easy, but in reality, it's even harder than reaching the sky. I failed last year because of the word "stability."
There are some seemingly trivial little pieces of knowledge in the crypto world that often determine the success or failure of a trade. Today, let's discuss a few truly practical but easily overlooked techniques.
**The Arithmetic of Cost Averaging**
Many people have misconceptions about this operation. For example, investing 10,000 USDT when a coin is at 10 USDT, then adding another 10,000 USDT when it drops to 5 USDT. The average cost at this point is 6.67 USDT, not 7.5 USDT. This difference may seem small, but it can significantly impact position management with large positions. Understanding this algorithm thoroughly greatly influences subsequent exit strategies.
**The Power of Compound Interest**
Suppose you have 100,000 USDT, and you earn a steady 1% daily profit. By the end of the year with 250 trading days, your assets grow to 1,323,200 USDT. Over the next two years, the account size can directly surpass the 10 million level. Of course, all this depends on consistent and stable returns—which is the sticking point for most people.
**Probability and the Coordination of Take Profit and Stop Loss**
Assuming a strategy has a 60% win rate, with each profit target set at 10%. The key is that different stop-loss levels directly affect the expected return. Setting it too loose can wipe out multiple wins with a single drawdown; setting it too tight can lead to being stopped out prematurely. Finding this balance is the true trading framework.
Those who can consistently profit in the market are often not relying on highly accurate predictions, but rather mastering these fundamental principles and repeatedly refining them through practical experience.