The deeper the loss, the harder it is to recover—this is the cruelest truth of the market.
Buffett's old saying: "First rule, never lose money; second rule, remember the first rule."
Many people think about doubling their money every day, but forget that truly successful people only do one thing: never let their accounts run dry.
Why? Because math never lies.
Take a look at the most painful reality:
• Lose 10%, you need to earn 11% to break even;
• Lose 30%, you need to earn 43%;
• Lose 50%, you must double;
• Lose 70%, you have to reach 233% to recover.
This is why many people can never get out of trouble.
Because when you have knocked your account down to half, you are already "half a foot in ICU"; losing 70% basically means you are “waiting for the notification letter.”
Small losses can be made up, but big losses generally cannot be recovered.
Whether you can survive depends on whether you are willing to cut losses.
There are many ways to cut losses, and I commonly use four methods, with the last one being the simplest, most common, and most cost-effective.
Of course, every set of rules must be integrated with your system, your logic, and your rhythm, rather than blindly copied.
But at least today, please remember one thing:
You can be wrong a hundred times, but you cannot let one mistake eliminate you from the game.
Traders who do not cut losses have no future.
May you walk more steadily and shine brighter in the market.
