đ When Going Down 10% Is Not the Same as Going Up 10%: The Math of Trading đ
In the world of trading, it's easy to think that if an asset goes down 10% and then goes up 10%, you'll get your initial investment back. However, it's not that simple. đŹ
Practical example:
Imagine you invest $1,000 đ” and use 10x leverage, meaning you control $10,000 in the market. đ
If the value of the asset falls by 10%, your investment also loses 10%, reducing your position to $9,000. đ
If the market recovers and goes up 10%, it's natural to think that you'd get your $10,000 back. But the 10% gain is applied to the current $9,000, not the original $10,000. This leaves you with $9,900. đ
Conclusion:
When the value goes down, you need it to go up more than it went down to get back to where it started. đș In this case, a 10% rise is not enough to offset a 10% fall. This is an important lesson that every trader should understand before closing positions or making decisions in the market. đĄ
