💀 Pullbacks are part of trading; losses and risks coexist naturally!

In simple terms:

Retracement = the extent to which account funds fall from a high point to a low point.

Maximum Drawdown = The largest decline in capital that has occurred within a selected time period.

Average drawdown + duration = auxiliary indicators, helping you gain a more comprehensive understanding of risk.

For example:
The account dropped from 10k to 4k, then from 12k to 3k, with a maximum drawdown of 75%.
But the average drawdown may only be 5%, indicating that the fluctuations are not that exaggerated most of the time.
📊 Why pay attention to drawdowns?
1️⃣ Expose your risk control ability
2️⃣ Show your mental resilience
3️⃣ Auxiliary strategy optimization to avoid over-trading and emotional actions.
⏳ The duration of the pullback is also important.

Quick pullback = high volatility, high psychological pressure

Long-term slow drawdown = good risk control ability, stable strategy

💡 Core of the Transaction:

Accept the pullback and face the losses calmly.

Establish a risk management plan: control positions, set stop losses, and diversify reasonably.

Be clear about your bottom line, execute when it drops to the level, and do not blindly chase up or sell down.

Summary: Retracement is not scary, what is scary is having no plan, no logic, and no execution.
Learn to manage drawdowns, only then can you survive in the market for the long term ✊
‍#Crypto