⚠️ We often hear that the prudent way to speculate involves risking between 0.5% and 3% of the capital per trade, or at most 10%.
However, the advantages of a more aggressive strategy, where the total capital acts as the stop and the goal is to multiply the capital by 2, 3, or more in short periods such as weeks, fortnights, or a month, are rarely discussed.
It's not about gambling, but rather understanding that every speculation plan goes through positive and negative streaks.
The goal of managing risk aggressively lies in maximizing returns during favorable streaks.
If during these streaks you only increase your capital in a limited way, you are wasting your true potential.
Practical example:
- Strategy A:
Initial capital: 2,000 USD
Expected monthly return: 0% to 20%.
- Strategy B:
Initial capital: 200 USD
Expected monthly return: 0% to 1,000%.
It is true that, with an aggressive approach like that of Strategy B, the initial capital of 200 USD can be completely lost multiple times in a month, perhaps even four times.
But there are also times when the initial capital is not lost, and the rest of the month can be operated using only the accumulated profits.
This perspective demands accepting greater risks with the intent of making the most of favorable moments, recognizing that, along the way, there will be losses that must be accepted as part of the process.