No matter how good of a trader you are or become, drawdowns will always be an Achilles heel. After one of my best years trading in 2024, I came into 2025 flying high.
To be clear, I don’t change how I trade whether I’m winning or whether I’m losing, but to say I got socked in the mouth in January and February would be an understatement.
What’s even crazier is that this all happened before markets started to roll over in March and April. During the worst of this year’s volatility, I actually fared pretty well.
But like any professional trader, I stayed true to my model. And now, with the worst of the volatility seemingly behind us, I’ve made up virtually all my losses. The best part? There’s still seven months to go this year.
Let me share some of the details of this year’s rollercoaster ride with you
Knowing How to Win and How to Lose is Key
Am I pleased with the drawdown I suffered earlier this year? No. Do I think I could have handled it better in hindsight? Perhaps. Did I let it change my process on how I approach the market? No. And that’s where I give credit for my recovery.
It was pretty dramatic both ways. It started with the DeepSeek ‘Black Swan’ in January. I’m calling it a ‘Black Swan’ because I woke up to half of the stocks in my portfolio gapping down 20% at the open. The probability of that happening is extremely slim, but that’s the hand that I was dealt. It’s a great example of focusing on what you can control, and in that case, it’s only my position sizing that prevented a bad situation from becoming awful.
Here’s the thing – at no point during the drawdown was I ever worried about blowing up my account. Having that peace of mind was also key to staying in the zone despite being hit.
Many of you may know that I enjoy boxing and training martial arts. These are full on contact sports, and to be clear, there is an art to receiving punches too. This carries over into trading directly – knowing how to take hits, and when the moment is right – countering viciously – is the key to being a winner in the end.
I weathered the volatility of March fairly well, as I was down less than the overall market. In April, I finished in positive territory. May? Let’s just say, it’s been a lot of fun.
But am I writing this to celebrate anything at all? Absolutely not. As I said, there’s still 7 months left in 2025, and there isn’t anything to get excited about yet – the battle is far from over.
I’ll keep you posted on any big turning points,
Gianni Di Poce
THEOTrade
