Unit 1 · Level 3 · Drawdown psychology
Review: storm survival drill
The spiral starts with a thought, not a loss: "I need it back NOW." Revenge trading is painkiller shopping. The daily loss limit is a letter from calm-you that tilted-you must obey. And re-entry is rehab: diagnose, half size, earn it back with clean reps. Losses are tuition, but only if you stay enrolled.
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What you get asked
Match the situation to the drawdown rule it calls for
Four situations, four pre-made decisions. The theme of this whole unit: decide while calm, execute while not.
An account falls 50% in a tilt spiral. What gain does break-even now require?
From 50 back to 100 means doubling. The asymmetry between losing and recovering is the mathematical reason walking away early is cheap and walking away late is ruinous.
A revenge trade exists because of a ___, not because of a setup.
That's the test to run before every click in a drawdown: is this trade on the chart, or is it in me?
Which trader is handling a drawdown correctly?
Ben is hope from League 1, Carla is the martingale spiral, David is adding fuel. Ana lost the least important thing (one day) and kept everything else.
What is the single most important thing a drawdown protocol protects?
Every rule in this unit (limits, walk-aways, half-size returns) buys the same thing: survival. As the Investing course says about compounding, the ones who win are the ones still in the game. 🐜
The rest of this unit
Losing well is a skill. The spiral, revenge trading, and the art of walking away.