Why Most Traders Lose Money: It’s All About Risk

Capital destruction isn’t just about a losing streak — it’s about poor risk management. Even with a 50% win rate, large position sizes can wipe you out.

Here’s the math:

• Lose 10% → need 11% gain to recover

• Lose 20% → need 25% gain

• Lose 50% → need 100% gain

• Risk 1% per trade → down 10% after 10 losses

• Risk 5% → down 50% in the same scenario

It’s not your win rate — it’s your position sizing that often kills your account. Survival in trading depends on how well you manage risk, not how often you’re right.

Protect your capital. Small losses are recoverable — big ones aren’t.