The 10% Rule is a fundamental fund management principle aimed at achieving compounding effects.

Repeating ejections many times reminded me of the importance of money management. What should I do?

That’s obvious. I should just Google it. When I googled, I found something called the 10% method.

The 10% method is a simple casino攻略法 that bets 10% of the total funds continuously. When you go on a losing streak, the capital decreases slowly, and when you win, you can aim for compounding effects, which is its big feature.

It’s a technique that only bets 10% of your starting capital. Huh! Is that all?

To explain simply, let’s assume we bet with 1,000,000 yen at 10%. The payout is calculated as 1x. Now, let’s see. The so-called performance of the 10% method (o^-')b

With a capital of 1,000,000 yen, 10 consecutive wins become 2,590,000. After that, 10 consecutive losses reduce it to 900,000.

With a capital of 1,000,000 yen, 10 consecutive losses become 350,000. From there, 10 consecutive wins bring it to 900,000.

If your mood is bad, your assets could halve in no time. And even with a 50% win rate and 1x payout, losing 10% still hurts quietly. You may need to decide whether to pursue a higher-win-rate method or aim for even higher payouts. Even if you switch to 20% or 5%, the situation doesn’t change.

In binary options, you need a win rate above 40% to be profitable with a 2x payout. With a 1x payout, you need a win rate above 60% to be profitable. More than that, if there were a money-making method in binary options, you should straightforwardly trade FX instead.

Perhaps the 10% method might not work after all ヽ(゜◇゜)ノ

Even with a loss-cutting gain-with-safety method, if your win rate is 60% or higher, the 10% method might be fine.

The characteristic of the 10% method is that by betting 10% of total assets you can expect compounding effects. It doesn’t have to be exactly 10% of total assets. To put it grandly, it can be 1%, 3%, 5%, or 20% of total assets. As long as you stay within a calm range.

If the average monthly win rate is the same, whether wins lead or losses lead, you get the same result. I think it’s ideal if win rate is 60% or more and profit rate is 100% or more.

The condition for the 10% method to work is that if the average profit rate is high, then it’s okay even if the average win rate is lower. If the average profit rate is low, then it’s okay as long as the average win rate is higher. After that, just set a maximum loss with a stop order.

What matters is to keep a calm mind at all times and steadily practice a loss-cutting gain method.

Even after a losing streak, if you can maintain the same bet size, i.e., trade with the 10% method, you won’t panic in any market condition, avoiding the psychological battle of the market. Then, if you compare your own investment method with the bankruptcy probability of Valsela, your capital management will be in a perfect system if there’s no issue.

Otherwise, if you trade with the average monthly result, removing the element of luck, your wins or losses depend on your own talent, so you won’t self-destruct ヽ(゜◇゜ )ノ

Let’s test and analyze ヽ(゜◇゜ )ノ Let’s hypothesize ヽ(゜◇゜ )ノ

The 10% method pairs well with the bankruptcy probability of Valsaola. It might be the holy grail of money management. You won’t need to transform into a greedy hog and go all in, avoid unexpected losses, and avoid tantrums from drawdowns.

If you can practice a loss-cutting gain method with the 10% method, it would be ideal. Perhaps comparing your own investment method with Valsaola’s bankruptcy probability is the basis of fund management.

I specifically tested the 10% method. The bet amount for the 10% method can be rounded, rounded up, or rounded down, any is fine ヽ(゜◇゜ )ノ

Starting with 1,000,000 yen, after 3 consecutive wins and then 3 consecutive losses, using the “payout 1x calculation.”

First bet: 10% of 1,000,000 = 100,000 yen → win → payout 100,000 → balance increases to 1,100,000.

Second bet: 10% of 1,100,000 = 110,000 → win → payout 110,000 → balance increases to 1,210,000.

Third bet: 10% of 1,210,000 = 121,000 → win → payout 121,000 → balance increases to 1,331,000.

Fourth bet: 10% of 1,331,000 = 133,000 → loss → forfeited 133,000 → balance decreases to 1,200,000.

Fifth bet: 10% of 1,200,000 = 120,000 → loss → forfeited 120,000 → balance decreases to 1,080,000.

Sixth bet: 10% of 1,080,000 = 108,000 → loss → forfeited 108,000 → balance decreases to 970,000.

* The above example uses a 50% win rate and 1x payout.

Starting with 1,000,000 yen, after 3 consecutive wins, then 3 consecutive losses using a 2x payout

First bet: 10% of 1,000,000 = 100,000 → win → payout 200,000 → balance increases to 1,200,000.

Second bet: 10% of 1,200,000 = 120,000 → win → payout 240,000 → balance increases to 1,440,000.

Third bet: 10% of 1,440,000 = 144,000 → win → payout 280,000 → balance increases to 1,720,000.

Fourth bet: 10% of 1,720,000 = 172,000 → loss → forfeited 172,000 → balance decreases to 1,550,000.

Fifth bet: 10% of 1,550,000 = 155,000 → loss → forfeited 155,000 → balance decreases to 1,400,000.

Sixth bet: 10% of 1,400,000 = 140,000 → loss → forfeited 140,000 → balance decreases to 1,260,000.

* The above example uses a 50% win rate and 2x payout.

Seeking high win rates with binary options payout of 2x is difficult, and the break-even point with a 1x payout requires a win rate of over 60%. This means that even with the 10% method, you won’t win in binary options. With a 1x payout, the capital will shrink, but just by having a 2x payout you can aim for compounding effects.

Even with a 50% win rate, you gain 260,000 yen. This is because the condition to trade using a loss-cutting gain method was met, so with a 50% win rate the compounding effect works and you profited. If there exists a winning method in FX with a win rate of 50% or higher, I think trading with the 10% method is effective.

We must not forget that the opposite of loss-cutting gains is also a truth. If the profit rate is low but the win rate is high, loss-cutting gains still may not be necessary. Even with a payout of 1x or less, if the win rate is 70% or higher, the 10% method’s compounding effect can function sufficiently. What matters is risk-reward, and by comparing your own method with the 10% method and Valsaola’s bankruptcy probability for capital management, you can objectively view your assets. I believe this is the effect of money management and the essence of the 10% method.