How do you get out from a drawdown.

How to get out from a big lost or a serial of small loss? Well, the best way is not to get into one at all. That involve hard discipline and tough mental. I'm not that type of person, so let's face it, there will be huge lost one day, or 10 small cuts in a raw. Let's look at them in detail.

Let's say I have 1000$ account, when I'm down 40$, I don't feel anything, and it's so easy to get it back. When I'm down 400$ after one trade, I feel a lot, the whole world is changing, all the sudden I'm no longer the trading guru and my dream to trading to success becomes nightmare. Well, to get it back, I have to re-group, re-visit my trading skill, re-set my goal and stop level, and my game plan. OK, I have done it many times, what makes it so difficult to come back? Because when you loss 400$, it's 40% of your capital, if you want to get back 400$, it's 66% of the capital because now you only have 600$ in Oanda.

Well, if you can split your capital to be 2 part, 500$ each, and you only trade the 500$ size, meaning your max margin is on 500$, which will limit your size on each trade, but you need to make the same amount of pips when you want to come back from 600$ to 1000$. That makes the comeback much easier. Another way is to split your account with 80/20, that will need you keep a tighter stop. After a big lost, if you just find out that you are not able to trade the same size as before, that feeling is the worst!

The idel case is you trade with 200$ size and with 800$ as your bank, that way you have lots of hands to play and way more time to have fun.


Beginners tend to buying/selling as much as possible and wait for margin call. Pros keep their stop tight and keep trying and trying. There is an old saying cut your loser quick and let your winner run. There are 2 part of it, cut your loser meaning keep you in the game, even you get cut after cut, as long as it's 1 or 2 percent each time, you will always be in the game and have another chance to play. Let your winner run will give you the chance to get bigger profit, which in FX, it could be huge. Look at my trade on 11/25, I left my 40% of normal size and let it run for couple hours, it turns out to be a 30 pips profit in full size. Well, honestly, I was doing that in the previous 2 weeks as well, always have a small position and hope it runs. I was disappointed every single time, this time the payoff is huge.