نشر
Why Is One Loss More Expensive Than Many Gains?
Trading is a numbers game. But there is a brutal mathematical rule that most beginners ignore: The deeper the loss, the harder the recovery.
🔸 The Death Table:
Lose 10% capital 👉 Need 11% gain to break even. Lose 20% capital 👉 Need 25% gain to break evenLose 50% capital 👉 Need 100% gain to break evenLose 90% capital 👉 Need 900% gain to break even
🔸 Capital Preservation Lesson:
When you let a loss get out of control (holding losses), you are digging a hole you cannot climb out of.Warren Buffett has 2 rules Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. He doesn't mean never have a losing trade, but never let capital suffer massive drawdown.
🔹 Risk Management Strategy:
Limit Risk per trade to 1% to 2% of total equity.If you follow the 1% rule, you would need to lose 100 trades in a row to blow your account. This ensures you survive the darkest times to await recovery.
How much % of your account are you risking on the next trade? Do you know how long it will take to earn that back if you lose?
News is for reference, not investment advice. Please read carefully before making a decision.
🔸 The Death Table:
Lose 10% capital 👉 Need 11% gain to break even. Lose 20% capital 👉 Need 25% gain to break evenLose 50% capital 👉 Need 100% gain to break evenLose 90% capital 👉 Need 900% gain to break even
🔸 Capital Preservation Lesson:
When you let a loss get out of control (holding losses), you are digging a hole you cannot climb out of.Warren Buffett has 2 rules Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. He doesn't mean never have a losing trade, but never let capital suffer massive drawdown.
🔹 Risk Management Strategy:
Limit Risk per trade to 1% to 2% of total equity.If you follow the 1% rule, you would need to lose 100 trades in a row to blow your account. This ensures you survive the darkest times to await recovery.
How much % of your account are you risking on the next trade? Do you know how long it will take to earn that back if you lose?
News is for reference, not investment advice. Please read carefully before making a decision.
إخلاء المسؤولية: تتضمن آراء أطراف خارجية. ليست نصيحةً مالية. يُمكن أن تحتوي على مُحتوى مُمول. اطلع على الشروط والأحكام.