Risk of Ruin: Why One Big Bet Can End Your Trading Career
Risk of ruin is the probability that a losing streak wipes out your account entirely. The math shows that even with a winning strategy, betting too large a percentage per trade makes eventual ruin almost certain, because losses compound faster than gains can recover them. A 50% drawdown needs a 100% gain just to break even. Keeping position sizes small relative to your capital is what keeps a string of losses from becoming game over.
#crypto $KAIA 👇
Risk of ruin is the probability that a losing streak wipes out your account entirely. The math shows that even with a winning strategy, betting too large a percentage per trade makes eventual ruin almost certain, because losses compound faster than gains can recover them. A 50% drawdown needs a 100% gain just to break even. Keeping position sizes small relative to your capital is what keeps a string of losses from becoming game over.
#crypto $KAIA 👇