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There’s a particular feeling that comes with sitting in a drawdown period. Looking back through the journal and realizing the last profitable session was weeks ago. Scrolling through the log and seeing expense, no trigger, no trigger, expense, expense. It’s the kind of stretch that makes it easy to start labeling things. “It’s been rough.” “It’s been bad.” “It’s been terrible.”
But here’s what I’ve learned after years of trading and marketing: the words matter. The language a trader attaches to their experience directly shapes how they respond to it. And that response is what determines whether the business stays open or shuts down.
The Language We Use Changes the Game
I took some time today to go through my recent sessions. And I made a very deliberate choice in how I described what I was looking at. I didn’t say it’s been rough. I didn’t say it’s been bad. I didn’t say it’s been terrible or atrocious. Because it hasn’t been any of those things. It’s been a season of business. That’s it.
When a trader starts attaching emotionally charged language to a drawdown period, it does something to the psyche. It triggers a response. It creates urgency where urgency doesn’t belong. It makes the next session feel heavier than it needs to be. And that heaviness leads to decisions that are driven by emotion rather than by the plan.
This is part of what I explored in “Pull the Trigger” around the idea of neutrality. Looking at what happened without the lens of “good or bad” or “right or wrong.” If someone had to explain what happened in a trading session without using any of those words, the explanation would be much closer to the truth of the situation. And the truth is usually a lot more manageable than the story being told internally.
So I’ve made it a practice. Drawdown is not “bad.” It’s a season. Expense days are not “failures.” They’re operational costs. The language stays neutral because neutral language leads to neutral decisions. And neutral decisions are the ones that keep the business running.
Expenses Are Guaranteed. Profit Is the Objective.
Every single business that has ever existed has expenses. That’s not a maybe. That’s not a sometimes. That’s a guarantee. If someone opens a restaurant, there are food costs, labor costs, rent, utilities. Those expenses exist whether or not a single customer walks through the door that day. The business still has to pay.
Trading is the same. The one thing that is 100% guaranteed in this business is that there will be money going out. Expenses are built into the game. They’re the cost of operating. The objective is not to eliminate expenses because that’s impossible. The objective is to generate enough profit over time that it outweighs those expenses and keeps the doors open.
So when I look at a session that ends in a small net expense, I’m not panicking. I’m not spiraling. It would take a very long time to bleed an account out at that rate. And more importantly, the strategy is not designed to win every single session. It’s designed to produce returns over an extended period that far exceed the cost of the sessions that don’t go in my favor.
This is the mentality shift that separates traders who last from those who don’t. The ones who treat every expense day like a crisis are the ones who start making reactive decisions. They change their strategy mid-drawdown. They abandon their system. They chase. And then they really do blow up. Not because the strategy was broken, but because the emotional response to a normal part of business is what broke everything.
Knowing When to Change vs. When to Keep Going
One of the hardest things in trading, and honestly in any business, is knowing the difference between “this isn’t working and needs to change” and “this is just a season I need to ride through.”
I’ve been in drawdown for a stretch now. And the temptation is absolutely there to start tweaking things. To adjust the system. To add something, remove something, try a different approach. But here’s what I’ve come to understand: the amount of data I’ve collected since the last adjustment is simply not enough to make that call.
It’s not the time frame that matters. It’s the data. A trader can go through two months of drawdown and still not have enough data to justify a change if the conditions during those two months were limited to a specific type of market environment. What’s needed is data from the strategy’s highest potential sessions, data from the worst potential sessions, and data from everything in between. All the different conditions. All the different types of days.
The last time I made a significant change to my system, it took months of collecting data before I pulled that trigger. And that was intentional. Because making a change based on incomplete information is just as dangerous as not making a change when the data clearly says one is needed.
So for right now, the move is to keep collecting. Keep trading the plan. Keep journaling every session. And let the data tell the story instead of letting the emotions write it.
Structuring Risk: Max Profit Potential vs. Max Expense Potential
One thing that’s worth thinking about when building a trading system is how the risk structure is designed from the ground up. And I’m not talking about specific numbers or strategy details here. I’m talking about the framework.
The idea is simple: the maximum profit potential should exceed the maximum expense potential by design. Not by hope. Not by luck. By design. A trader can structure this in different ways. It can be done by limiting the number of consecutive expense positions allowed per session. It can be done by structuring the point values so that winning positions capture more than losing positions give back. Or it can be a combination of both.
The point is that symmetry is not required. A system does not need to have five potential winners balanced against five potential losers. In fact, that kind of symmetry might not serve the strategy at all. The power is in the asymmetry. Building the system so that even in a worst-case session, the damage is contained. And in a best-case session, the upside has room to run.
This is where the work happens before the market even opens. The structure of the risk plan is what gives a trader the ability to sit through drawdown without panicking. Because the plan already accounts for it. The worst-case scenario has already been defined. And when the worst case is known, it’s a lot easier to stay calm when the session isn’t going the way it was hoped.
Redefining the Reward: Why Profit Is Not the Prize
This is one I feel strongly about. The traditional way traders frame things is “risk to reward” and that reward is always tied to the P&L. How much money was made. How many points were captured. The dollar amount at the end of the session.
I don’t like that framing. And here’s why.
When the internal reward system is tied to monetary outcomes, the trader is essentially telling their brain that the only “good” outcome is making money. Which means every session that doesn’t make money triggers a negative emotional response. That negative response compounds over time. It creates anxiety, hesitation, and eventually fear. Fear of pulling the trigger. Fear of taking the next trade. Fear of the plan itself.
This is exactly what I wrote about in “Pull the Trigger.” The fear that stops traders from executing is often rooted in how their internal reward system has been wired. If profit is the only thing that gets celebrated, then every expense feels like punishment. And nobody wants to willingly walk into punishment.
So I flipped it. My reward is not profit. My reward is execution. Did I follow the plan? Did I take the triggers I was supposed to take? Did I exit where I was supposed to exit, or did I bail early because of a feeling? Did I chase, or did I respect the rules when I didn’t get filled?
When accuracy of execution becomes the measuring stick, the emotional relationship with the outcomes changes completely. A session that ends in a small expense but was executed with 100% accuracy to the plan? That’s a win. A session that ended profitable but involved chasing, breaking rules, and getting lucky? That’s not a win. That’s a liability waiting to show itself again.
The internal reward system is powerful. And every trader has the ability to take control of it instead of leaving it vulnerable to whatever the market does on any given day.
The Market Maker Mindset and Understanding the Audience
Something I think about a lot, and something I plan to break down more in upcoming posts, is the parallel between marketing and market making.
Wholesale, which is what I call market makers, has a job. That job is to facilitate orders and keep the market functioning. And to do that job effectively, they need to understand their audience. They need to understand how retail participants think. What they react to. What triggers them to send orders to the market.
This is literally marketing. If someone is running a business and trying to sell a product, the first thing any good marketer will say is: know the audience. Understand what they want, what they fear, what motivates them to act. And then position the product in a way that gets the desired response.
The same thing applies to how price moves. The structure that gets printed on the charts is not random. It’s designed to generate participation. And if a trader can start thinking about what other participants are likely thinking at any given point in the session, that perspective becomes incredibly useful. Not to predict where price will go, because nobody can do that. But to understand the behavior that’s driving the auction.
I see things in a very colorful way when it comes to how all of this works. The intricacies of it. And honestly, I’m much better at writing it out than explaining it verbally in real time. There’s a lot of nuance. But the core idea is this: wholesale isn’t the enemy. Wholesale is running a business. And understanding how that business operates gives a trader a significant edge in how they interpret what’s happening on the charts.
Patience, Breath, and the Moments Between Triggers
There are moments in every session where nothing is happening. Price is grinding inside a range. Volume is low. The supply floor is noisy but nothing significant sticks out. And the urge to do something starts building.
I know this feeling well. It’s that physiological response where the anxiety starts creeping in. The hands want to press the button. The mind starts rationalizing why maybe this one time it’s okay to act before the plan says to act. And that feeling multiplies significantly if you’re holding a position.
In those moments, the best thing I’ve found is to just focus on the breath. Not overthinking. Not analyzing. Not trying to predict what’s coming next. Just breathing. Slow, controlled breaths. Letting the body know that everything is okay and that flight or fight mode is not needed right now.
This connects directly to what I laid out in “Pull the Trigger” around managing the physiological responses to trading. The fear and anxiety that builds during live trading is not just mental. It shows up in the body. Increased heart rate, muscle tension, shallow breathing. And the fastest way to reset that is through the breath.
If the next step in the plan is clear, then all that’s needed is patience to wait for it. And if the next step isn’t clear, that’s not a signal to act anyway. That’s a signal that the plan needs more development. Either way, forcing action is almost never the answer. Preparation beats reaction every single time.
The Business Stays Open
At the end of the day, drawdown doesn’t mean the business is broken. It means the business is operating. Every business goes through seasons where the expenses outpace the revenue. That doesn’t mean the product is bad or the strategy is flawed. It means the conditions haven’t aligned yet. And the data is still being collected.
The traders who make it in this environment are not the ones who never experience drawdown. They’re the ones who can sit through it without abandoning their system. The ones who keep the language neutral. The ones who keep collecting data. The ones who make execution the reward instead of the dollar amount.
One thing I wrote in my session notes that keeps coming back to me: “Decision makes the trade long before the entry does.” The decision to follow the plan, to respect the risk, to keep the business running through the lean seasons. That decision is what makes all the difference.
So the doors stay open. The data keeps getting collected. The plan keeps getting followed. And the profit seasons? They’re ahead. They always come back around for the traders who are still here when they do.
Trade it easy ✌🏾
