Trading always involves risks and losses. Many new traders forget this. They believe they found a foolproof method. But no method ensures money every day, week, or month. Losses, or drawdowns, will happen. This is normal.
When new traders make money early, it can be dangerous. They think they "got it". But they just got lucky. When losses come, they feel lost or think trading is a scam. This mindset can lead to mistakes. When facing drawdowns, they might take higher risks to recover. This is very dangerous.
Proper planning and risk control help. One must understand their own risk tolerance. Do not overexpose yourself. Losses must be expected and managed. Consider the example of Larry Williams. His son, a doctor, analyzed traders' mindsets. Larry asked if I would participate in a survey. I agreed. The doctor said I was risk-averse and could risk more. I did. But losses grew. I reduced my risk again. This taught me to stay within my comfort zone.
You must accept that losses and drawdowns are part of trading. Keep them under control with proper strategies. Good planning and a clear mind help during tough times. In 2009, I thought I could handle a 25% drawdown. I felt terrible at just an 11% drawdown. Realize your true pain level. Lower it if needed to avoid discomfort.
When you see strategy equity lines, remember: the future is uncertain. Past performance does not guarantee future results. Always be prepared for losses. Do not get scared when they happen. Stay calm, analyze, and stick to your plan. With proper methods, those drawdowns will eventually turn into new peaks. Be patient, be prepared, and follow your plan.
