Drawdown: perception distortion.

Hey everyone, Can't believe I'm making a "psychology" post lol Let's say you started trading with $1,000. You backtested your strategy, did WFA, and you know the expected max drawdown is about 20% ($200). You trade for a while and make 50% in half a year. At some point the account drops almost $200 and it feels fine. In your perception it’s not a big amount - like two trips to the supermarket. Now you see that youre profitable, so you decide to scale: you add $2,000 and your account becomes $3,500. But here is the question: are you ready to see it drop $700? Most people are not, bcause psychologically you are still the same person who started with $1,000. Only half a year passed. Your life hasn't changed, you didn't suddenly start buying expensive things. Your perception of money is still the same. So when the account drops $700, your brain doesn’t see it as 20% of $3,500. Your brain sees it as 70% of the original $1,000. And that’s where people panic. this happned to me in September. People become trigger-happy, close trades early, override the system, and ruin the strategy. How to deal with it: * Scale slower. * Use psychological tricks to adjust your perception of money. For example, try buying slightly more expensive things so your brain gradually gets used to larger amounts. * Or mentally shift the decimal point: think of the account as $350.0 with a DD of $70.0. This one is my favorite. The strategy didn't change - only the numbers did. But your brain reacts to the numbers.