Handling Drawdowns And Losing Streaks
A 1-minute lesson from the MarketPro academy, one of 14 in building a trading plan.
Every trading approach, no matter how sound, experiences stretches of losing trades. A trading plan that only addresses winning conditions is incomplete — it also needs explicit rules for how to behave during a drawdown, written in advance while thinking clearly.
Every trading approach, no matter how sound, experiences stretches of losing trades. A trading plan that only addresses winning conditions is incomplete — it also needs explicit rules for how to behave during a drawdown, written in advance while thinking clearly.
Drawdowns tend to trigger emotional responses that push traders away from their plan: increasing position size to "win it back" faster, abandoning a sound strategy after a short losing stretch, or freezing up and missing valid setups out of fear. Pre-committed rules reduce the influence of these emotions in the moment.
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Lesson 8 of 14 in Building a trading plan
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Not investment advice. Past performance is not indicative of future results.