I Hate Drawdowns

Sean McLaughlin
April 16, 2024

Whether it’s a pullback in a position or a pullback in my portfolio, drawdowns are the hardest thing to endure as a trader.

However, let’s not forget that I first had to have a winning trade on to suffer a pullback. That’s good!

If I want to have a big winner, it must first start as a small winner. Then the hard work begins…

To grow from a small winner into a big winner, it’s very rare for the path to be a straight line. There will be pauses. There will be the occasional shakeout of weak hands. There will be people on social media or TV talking about how extended the move has become and how there’s a high risk of a correction.

There will seem to be a million reasons to take profits before they escape my grasp.

Pullbacks and drawdowns are the devil tempting me to make a bad decision at the worst possible time.

The best way I know how to stick with my winners is to have a plan from the beginning of the trade and to be militant in my following of the plan. And then I have to attempt to turn off all emotional feelings I have about the day-to-day volatility. This is FAR easier said than done. This is where I spent a lot of my focus and energy to improve.

One thing I constantly have to remind myself is that it only takes one trade to make my month or my year. And the only way I’m going to earn that win is by sticking to the plan and tuning out all the noise that the market will throw at me along the way.

Corrections will come, as sure as death and taxes. Have a plan for them and ride the waves!

Trade 'em Well,

Sean McLaughlin
Chief Options Strategist
All Star Charts, Technical Analysis Research

Filed Under: