How to Make Peace with Large Floating Drawdowns? Real Traders Are Never Afraid of Losses
How to Make Peace with Large Floating Drawdowns? Real Traders Are Never Afraid of Losses
Conclusion first: Only when your trading system has proven long-term profitability and you execute it with 100% discipline, can you treat all losses (realized or floating) as the necessary cost of making money, and clearly distinguishing between system-expected drawdowns and out-of-system mistakes.
Great trading is never about predicting tops and bottoms
It’s about following the trend once it reveals itself and treating drawdowns as the toll you must pay.
The Brutal Reality of Gold’s Two 11% Drawdowns in 2025
Gold in 2025 taught every trend follower a public lesson:
- •After topping near $3500 on April 22, gold entered a ~3-month range with ~11% drawdown;
- •After hitting $4380 on Oct 21, another ~11% pullback lasting over a month.
We are always driving using the rear-view mirror
$3500 and $4380 looked like “obvious” tops in hindsight — but who dared to say they were the final tops in real time? The same was said at $3000.
Every Choice Has Two Sides
Trend Explosion Style
Hold full position through drawdowns
- •Extremely painful in quiet periods
- •Outperforms everyone when it finally runs
Take Profit Style
Lock in profits at new highs
- •Comfortable during pullbacks
- •Misses the meat of strong trends
Range Trading Style
Sell high, buy low, rarely hold overnight
- •Almost no floating drawdown pain
- •Sits out entire trending moves
If you want the upside of your system, you must accept its downside. Otherwise you will never achieve statistical edge.
Large floating drawdown = just another form of loss
As long as your system is profitable over the long run, every expected drawdown is simply the price of admission.
Latest News
Silver price today: Silver rises, according to FXStreet data
Silver prices advanced on Tuesday, with XAG/USD trading at $58.96 per troy ounce, according to FXStreet data. The metal rose 4.54% from Monday’s $56.40, exten
British Pound: CPI focus supports Sterling against US Dollar – Societe Generale
Sterling is holding firm against the US Dollar, with GBP/USD trading above its 200-day moving average near 1.3403 as dip buyers continue to step in. Societe G
162.70: Japanese Yen nears 40-year lows against the US Dollar
The Japanese Yen remained under heavy pressure on Tuesday, with the USD/JPY currency pair trading near 162.70, a level that leaves the exchange rate close to
Euro: Growth validation needed for value case – BNY
The EUR is drawing renewed attention in forex trading as BNY’s Geoff Yu says European assets are beginning to show value, supported by a steady European Centr
Related Articles
Martin Gale Is Life Itself
Martin Gale Is Life Itself The electric car glides past the neighboring tech building at low speed. ...
2026 New Year Trading Survival Guide: Why Still Losing Even When Direction Is Right? From Prediction-Driven to System-Driven
2026 New Year Trading Survival Guide: Why Still Losing Even When Direction Is Right? First real meat...
Break Free from the Crazy Trading Loop: The Four Fatal Mistakes of 90% Who Blow Up
Break Free from the Crazy Trading Loop: The Four Fatal Mistakes of 90% Who Blow Up The market is nev...