Here's a heart-wrenching fact:
—— The deeper the loss, the harder it is to turn things around; this is the cold, hard reality of the market.
Warren Buffett has a classic saying: "First, never lose money; second, always remember the first rule."
But many people, day in and day out, are just thinking about doubling their funds, forgetting that the real experts focus on one thing: making sure they don't lose all the money in their accounts.
Why is this so important?
Because mathematics doesn't lie.
Let me give you a few examples:
If you lose 10%, you need to earn 11% to break even;
If you lose 30%, you need to earn 43% to recover the loss;
If you lose half, you need to double your money to get back on track;
If you only have 30% left, you need to earn 233% to recover.
This is why so many people remain trapped and can't get out.
When the money in your account is only half left, it's like having "one foot already in the ICU"; if you lose to only 30%, you’re basically "waiting for a critical illness notice."
If the loss is small, there is still a chance to make it back, but with a big loss, it's basically hopeless.
Whether you can survive in the market depends on whether you know how to cut losses in time.
There are many ways to cut losses; I commonly use four methods, and the last one is the simplest, most commonly used, and cost-effective.
However, each loss-cutting discipline must be combined with your own trading system, logic, and rhythm, so don’t just blindly copy others.
Today, after reading my article, you must at least remember one thing:
You can make a hundred mistakes in trading, but you must never let one mistake kick you out of the game.
Those who can't cut losses have no future in the market.
I sincerely hope you can navigate the market more smoothly and with more hope!
I am Anqi, a blogger dedicated to spot and contract trading. If you find my article helpful, come find me in the chat room to learn more trading strategies and experiences.