Warren Buffett has two rules of investing.

Rule one: don't lose money.

Rule two: don't forget rule one.

Sounds like a cliché.

But there's serious mathematics behind it.

If you lose 50% —

you need a 100% gain

just to get back to where you started.

That's not psychology.

That's simple arithmetic that most people

ignore because they're too focused

on chasing the upside.

In the market, survival is a competition.

A trader who stays in the game for 10 years

with average returns

will outperform the trader who posts

massive numbers for 2 years

then blows up in year three.

Compounding only works

if the capital is still there to compound.

So before asking

"how much can I win?" —

Ask first:

"How much can I absorb

without getting knocked out of the game?"

That answer is your real strategy.

#Trading #RiskManagement #Investing

#Compounding #Eugenivium #CryptoThoughts