Lesson 3 – Impatience With Drawdowns

Problem
You abandon systems after normal losing streaks, thinking they’re broken.

Cause

• Lack of trust in edge.
• Pain of losses feels unbearable.
• Overreacting to short-term results.

How the Brain Works

• Losses activate pain centers.
• Loss aversion magnifies drawdowns emotionally.
• Short-term pain outweighs long-term logic.

Real-Life Example
Viktor backtests a 55% win rate system. After 5 losses, he abandons it. The next 10 trades would’ve been winners.

Practical Solutions

1. Backtest Expected Drawdown – know what’s “normal.”
2. Journal Each DD – compare to historical averages.
3. Sample Size Reminder – think 100 trades, not 5.
4. Equity Curve Visualization – zoom out to big picture.

Key Takeaway: Drawdowns are the tuition you pay 📉.
Patience turns them into future gains 📈.