$$$
Imagine Two Traders: 𝐉𝐚𝐲 & 𝐒𝐚𝐫𝐚
$BTC $BNB $TRUMP They both begin their trading journey with $1,000 in their accounts.
𝐉𝐚𝐲 is a high-risk taker — he puts $250 on the line per trade (he probably skydives with a blindfold on).
𝐒𝐚𝐫𝐚 plays it safe — risking just $20 per trade (and she likely triple-checks if her door is locked before sleeping).
Both use a trading strategy that wins 50% of the time, with a 1:2 risk-to-reward ratio.
Let’s say their next 8 trades go like this:
Loss, Loss, Loss, Loss, Win, Win, Win, Win
Here's what happens:
𝐉𝐚𝐲's result:
$250
$250
$250
$250
= Account wiped out before he even gets to the winning trades!
𝐒𝐚𝐫𝐚's result:
$20
$20
$20
$20
$40
$40
$40
$40
= Profit of $80
The Lesson?
Losses in trading are unavoidable. But smart risk management turns a disaster into a minor bump.
It’s not about avoiding loss — it’s about surviving it.
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