đ¨ The Law of Large Losses â A Lesson Every Trader MUST Learnâźď¸
Hereâs the harsh truth most traders ignore:
The deeper the loss, the harder the recovery. Letâs break it down:
Loss vs. Required Gain to Break Even:
⢠Lose 10%? You only need +11% to recover.
⢠Lose 20%? Now you need +25% to break even.
⢠Lose 50%? Youâll need a +100% comeback.
⢠Lose 80%? You must gain a massive +400% just to recover!
Thatâs the brutal math of compounding losses. And it teaches us one critical principle:
Protecting your capital is more important than chasing quick gains.
Smart traders donât focus only on winning big â they focus on losing small.
Hereâs how you do that:
â Use stop-losses to cut losers early
â Avoid over-leveraging â it magnifies both gains and losses
â Position sizing is key â never risk more than you can afford to lose
â Donât trade what you donât understand â learn first, trade second
Survival is the strategy.
The traders who win in the long run are the ones who can weather any market â bull or bear.
Because in this game, capital is oxygen. Run out, and itâs over. Stay in, and opportunity always comes again.
Protect your downside â thatâs the only way to earn the upside.
Make that your golden rule.
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