Drawdown

Lose half of an account and what remains must double to get back to where it started. Nothing unusual has happened: the loss was half of the larger figure, and the recovery has to be earned on the smaller one.

For small losses the difference is slight, which is why it is easy to overlook. It grows quickly. The curve leaves the dashed line of “a gain equal to the loss” almost at once and, past the half-way point, climbs steeply away from it.

This is the arithmetic reason position sizing matters more than any single trade: the cost of a large drawdown is not the loss itself but the size of the task it leaves behind.