Big losses are hard to recover from

The maths of losses

The lesson in full

Losses and gains aren't mirror images. That simple maths fact is why professionals care more about protecting money than chasing big wins.
A drawdown is the fall from your highest balance to the lowest point after it. Going from 10,000 to 8,000 is a 20% drawdown.
Lose half and you need to double your money, +100%, just to get back to where you started.
The pattern: −10% needs +11%. −20% needs +25%. −50% needs +100%. −90% needs +900%.
Real example: from 2007 to 2009 the S&P 500 fell about 57%. Even counting dividends, it took around five years to get back above its old high.
Common mistake
Mistake: “I'll double my position to win it back faster.” Bigger bets after losses deepen drawdowns and can end your account.
Key takeaway
Small, controlled losses are easy to recover from. Big ones aren't. Protect the downside first.

After a 50% loss, you need how much gain to get back? +100%Half of 10,000 is 5,000, and 5,000 must double to return to 10,000.
A drawdown is... The fall from a peak to a lowIt measures how far your balance fell from its highest point.
Why limit losses? Big losses are hard to recover fromThe deeper the hole, the bigger the gain needed to climb out.
Your account falls from 10,000 to 8,000. To get back, you need... +25%8,000 × 1.25 = 10,000. The gain needed is bigger than the 20% lost.