Imagine

There are two traders, ๐‰๐จ๐ก๐ง ๐š๐ง๐ ๐’๐š๐ฅ๐ฅ๐ฒ.

They both start with a $1,000 account.

๐‰๐จ๐ก๐ง is an aggressive trader and he risks $250 on each trade (he also probably jumps out of planes without checking if his parachute is working).

๐’๐š๐ฅ๐ฅ๐ฒ is a conservative trader and she risks $20 on each trade (she also probably has multiple insurance policies and wears a helmet to bed).

Both adopt a trading strategy that wins 50% of the time with an average of 1:2 risk to reward.

Over the next 8 trades, the outcomes are Lose Lose Lose Lose Win Win Win Win.

Hereโ€™s the outcome for ๐‰๐จ๐ก๐ง:

-$250 -$250 -$250 -$250 = BLOW UP

Hereโ€™s the outcome for ๐’๐š๐ฅ๐ฅ๐ฒ:

-$20 -$20 โ€“ $20 -$20 +$40 +$40 +$40 +$40 = +$80

So hereโ€™s the deal:

As a trader, youโ€™ll encounter losses regularly, guaranteed.

But with proper risk management, you can contain these losses till it feels like an โ€œant biteโ€.

๐Œ๐ฎ๐ฌ๐ญ ๐‹๐ข๐ค๐ž, ๐’๐ก๐š๐ซ๐ž ๐š๐ง๐ ๐…๐จ๐ฅ๐ฅ๐จ๐ฐ ๐Ÿ๐จ๐ซ ๐ฆ๐จ๐ซ๐ž ๐ˆ๐๐…๐Ž ๐Ÿ˜ธ