Your first drawdown as a beginner: what did you do?
The first time an account drops 10% or 20%, new traders usually do one of three things: stop entirely, chase the loss, or pretend it isn't happening. The response matters more than the drawdown itself.
Share:
- roughly how deep your first drawdown went
- what you did while it was happening
- what you know now that would have helped then
The drawdown and recovery maths shows how recovery gets harder the deeper the hole.
Background: Drawdown and recovery: why a 50% loss needs a 100% gain
Losses and gains aren't symmetrical. See how much you need to recover from a drawdown, what losing streaks do at different risk levels and how to set limits.
How much do you need to gain to recover from a 50% loss?
100%. The gain needed is the loss divided by one minus the loss, so larger drawdowns need disproportionately larger gains.
What is maximum drawdown?
The largest fall in account value from a peak to a later low, before a new peak is reached, usually expressed as a percentage.
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