You're down 15% from your peak. Maybe 25%. The number in your account is smaller than it was last month, and every trade feels heavy. This is a drawdown. And how you handle it determines whether it's a temporary dip or the beginning of the end. ## The Math of Drawdowns The first thing to understand about drawdowns is the asymmetric math of recovery: | Drawdown | Required Gain to Recover | |----------|------------------------| | -5% | +5.3% | | -10% | +11.1% | | -20% | +25.0% | | -30% | +42.9% | | -40% | +66.7% | | -50% | +100.0% | A 10% drawdown requires an 11% gain to recover. A 50% drawdown requires doubling your remaining capital. This is why limiting drawdowns is more important than maximizing returns. ## Why Drawdowns Get Worse (The Spiral) Most blowups don't happen from one bad trade. They follow a predictable sequence: 1. **Normal loss** — part of trading, expected 2. **Emotional response** — frustration, urgency to recover 3. **Revenge trading** — quick re-entries, larger sizes, looser setups 4. **Deeper drawdown** — the recovery trades make it worse 5. **Desperation** — all-in on "sure things" to get back to breakeven 6. **Account damage** — what started as -5% becomes -30% The drawdown itself isn't the problem. The behavioral response to the drawdown is. ## 5 Mistakes Traders Make During Drawdowns ### Mistake 1: Increasing Size to Recover Faster **The logic:** "I'm down $2,000. If I size up 3x, I only need 3 good trades to recover." **The reality:** If those 3 trades lose, you're now down $5,000+ instead of $2,000. Sizing up during drawdowns accelerates losses more often than it accelerates recovery. ### Mistake 2: Changing Strategy Mid-Drawdown **The logic:** "My strategy isn't working. I need to try something different." **The reality:** Every strategy has drawdown periods. Switching strategies during a drawdown means you eat the drawdown of your old strategy AND the learning curve losses of a new one. If your strategy has a positive exp