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A bit shocked, I just found out that for small capital traders (below 1wu), their overall returns are lower than those of the profit-taking groups...
In other words, with a smaller principal, the cost-effectiveness of increasing the principal through trading is not as fast as directly earning money from working.
And when your principal starts to accumulate to a certain scale, making trades, even low-risk trades, can lead to long-term exponential growth.
For a simple example, if your monthly personal expenses are 4000u and your monthly cumulative trading return rate is 20%, then you need at least 20000u in principal to balance...
This doesn't even take into account bad luck, where the whole month is a loss...
Even so, you cannot achieve a continuous accumulation of principal.
But if you have 20,000 as your principal, then under the same conditions, your monthly surplus can reach 16,000, which will gradually increase your principal, achieving exponential growth.
So one obvious feeling I have is that if your trading capital is less than 5,000, the best strategy is to avoid doing full-margin trading for now. Just take out 1,000 and follow the market, focusing your energy on increasing your capital. Working or earning extra income is fine; in short, don't think about achieving a balance of income and expenses solely through trading.
But you also cannot avoid trading; if you stay away from the market for a long time, the trading system will have problems...
Once the principal gradually increases to a level where low-risk returns can also achieve a surplus, then consider achieving positive growth through long-term trading.
After all, if you only have 1000u, then according to the calculation of earning at least 1000u from working for a month, your monthly account return rate is greater than 100%.
The threshold varies for each person based on their monthly expenses, so calculations need to be made.
Following this line of thought, if your principal exceeds 100,000, the cost-effectiveness of trading will gradually decrease. This is because the yields from ultra-low risk financial management can not only cover your daily expenses but also achieve positive accumulation of your principal. In other words, you can obtain the profits that others make from trading with small amounts of capital for a month without taking any risks.
Only after this can you be considered invincible, and you can take out a portion of the small principal again to repeat the cycle of stage 2.
To summarize, a basic idea is:
When the principal is small, all operations aim to increase the principal, but one cannot avoid trading and must remain sensitive to the market.
Once the principal reaches the threshold, begin engaging in high-risk trading to increase the principal at a faster rate.
After the principal reaches a certain scale, reduce the frequency of transactions, minimize risk exposure, and ensure that the risk-free return reaches 2 to 3 times the amount needed for living.
Finally, withdraw the principal that meets the trading threshold, leaving the majority of the risk-free income position, and repeat the risk trading process of step two.
If step two fails and results in a loss that causes the principal to fall below the threshold, then return to step one to re-accumulate.
By looping multiple times like this, you only need to succeed once in step two.
The methodology of achieving financial freedom through trading sounds very much like playing a game...