The Devastating Impact of Drawdown

Mental Capital

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The Devastating Impact of Drawdown

Mindie Kniss

Mar 23, 2025

Read this on my website

Let’s say you’ve built up your account to $10,000. Then you lose $2,000. That’s a 20% drawdown.

To get back to $10K, you don’t just have to make 20%. You now need to make 25% because you’re working with a balance of $8,000.

I saw this chart1 the other day and printed it out to post near my trading desk to remind me of the true cost of losing my mind while trading.

With our example of a $10K account, if you lost 97%, you’d have $300 left. To get back to $10,000, that’s a 3,233% gain.

😳

The most frustrating thing is how long it can take to work your way out of the hole. This is why many people opt for revenge trading—trying to get back their P&L as soon as possible to avoid feelings of shame, guilt, irritation, or self-loathing.

Even if they blow up their account in doing so, at least they didn’t have to be PATIENT.

Patience is hard.

Patience is hard because it runs directly against how our brains are wired and how our world operates.

You see, we’re built for immediacy. Back in the day, our ancestors had to act fast to survive—run from the Sabor-toothed tiger, grab the food, and find shelter. That survival mechanism still fires off, even when there’s no tiger—just a slow Wi-Fi signal or a trade that hasn’t hit your target yet.

Then add our culture to the mix: instant gratification is the norm.

You can get food, entertainment, or even a date with a few taps. So when something doesn’t happen right away—whether it’s healing, success, love, or that perfect trade setup—it feels like something’s wrong.

I’m in this boat too. I’m pretty sure I singlehandedly contributed to the rise in Doordash stock earlier this year. A meal prepared and delivered to my door? Yes, please.

And if something I order takes longer than 2-day shipping, forget about it. 😂

But really? Patience is just being with what is—without needing it to be something else. And that’s hard because it requires trust:

Trust that things are unfolding in their own time.
Trust that you're still progressing, even if it doesn't look like it yet.
Trust that you are enough, even when the world tells you to hurry up and do more.

Patience forces us to sit in the unknown. And most of us would rather do anything other than that. We'd rather control, fix, or force it.

But patience isn’t passive. It’s choosing presence over pressure. It’s strength, not weakness.

I’m curious—where are you feeling the struggle with patience right now? Let me know in the comments below.