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
Gold trims a part of intraday gains amid bullish USD, hawkish central banks
Gold (XAU/USD) sticks to a positive bias through the first half of the European session on Friday, though it lacks follo. Free forex trading training by FX Killer.
USD/INR breaks above 95.00 on easing Middle East de-escalation hopes
The Indian Rupee (INR) extends opening losses against the US Dollar (USD) in afternoon trading hours in India on Friday . Free forex trading training by FX Killer.
EUR/USD: War-driven forecasts and softer Dollar outlook – Commerzbank
Commerzbank, led by Chief Economist Jörg Krämer, has cut its 2026 Eurozone growth forecast and now expects fewer ECB rat. Free forex trading training by FX Killer.
NZD/USD Price Forecast: Slips below 0.5800 toward two-month lows
NZD/USD extends its losing streak for the third successive day, trading around 0.5780 during the European hours on Thurs. Free forex trading training by FX Killer.
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