Welcome back to The Trading Brief, we are serving up a different edition this week, focusing on trading psychology—more specifically related to proprietary firm trading challenges. We hope you enjoy!

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Table of Contents

1. Dealing with Drawdown

2. Important Data Events

3. Trading Levels

4. Trader Resource Center

   1. Prop Firm Deals

TRADER TIPS
🌊 Riding the Drawdown Waves: How Prop Traders Stay Cool Under Pressure 🧠💼

Trading is a bit like surfing—some days, you ride the perfect wave, and other days, you find yourself tumbling in the whitewash. For prop traders, the stakes are even higher because you're trading with someone else’s money. Those drawdowns, when your account takes a dip, can feel like a tidal wave of doubt. But here’s the thing: drawdowns happen to everyone, even the best of the best. The key is to stay disciplined and not let emotions steer the ship.

Let’s unpack why mastering trading psychology is your secret weapon and how you can hold your ground when the going gets tough.

Why Trading Psychology Matters for Prop Traders

Prop trading firms are unique beasts. They entrust traders with significant capital, but they also come with strict rules—max drawdowns, daily loss limits, profit targets—you name it. That pressure can lead even experienced traders to second-guess themselves during rough patches.

Without solid trading psychology, it’s easy to spiral:

• You might deviate from your plan, trying to “win back” losses, which often digs a deeper hole.

• Fear and anxiety might make you hesitate on good setups, causing you to miss winning trades.

• Overconfidence after a lucky streak might lead to reckless behavior.

As Dr. Brett Steenbarger, a renowned trading psychologist, says:
"In trading, you don't control the market. You control yourself—and that’s where success lies."

For prop traders, maintaining discipline is more than just good practice—it’s survival. Firms reward consistency and adherence to their rules. Blow past a max drawdown, and you’re out. But handle losses professionally, and you build trust, setting the stage for higher capital allocations.

The Emotional Rollercoaster of Drawdowns

A drawdown isn’t just a financial event; it’s an emotional one. Imagine this: You’re down 8% on your account, the firm’s max loss is 10%, and every trade feels like walking a tightrope. Sound familiar?

Here’s what might be happening under the hood:

• Fear: Worrying about being kicked out of the program can lead to decision paralysis.

• Frustration: Beating yourself up over “stupid mistakes” makes it harder to focus.

• Desperation: Doubling your lot size or taking random trades to “fix” the situation often backfires.

This is why staying calm and following your plan is crucial. Easier said than done, right? Let’s look at how to actually do it.

How to Stay Disciplined During Drawdowns

1. Stick to Your Trading Plan Like It’s a Life Raft
   A well-thought-out plan is your best friend. It’s what keeps you from making impulsive decisions when emotions are high. Your plan should include:

   • Entry and exit criteria.

   • Risk management rules (e.g., never risk more than 1% per trade).

   • Maximum daily loss limits to protect yourself from… well, yourself.

   Remember, prop firms LOVE traders who follow their rules. A steady hand under pressure shows professionalism.

2. Master Risk Management
   Risk is part of the game, but reckless risk is a fast ticket out of the prop trading world.

   • Use stop-losses religiously. They’re not a sign of failure; they’re a sign of discipline.

   • Keep your position sizes consistent. Increasing your lot size out of frustration is like trying to patch a sinking ship with duct tape—it won’t end well.

   As Mark Douglas, author of Trading in the Zone, wisely said:
   "The best traders aren’t afraid of losing money because they know they won’t lose more than they can afford to."

3. Recognize and Manage Your Emotions
   Feeling frustrated after three losses in a row? It’s normal. But acting on that frustration is where things go sideways.

   • Take a breather. Step away from the screen for a few minutes (or hours).

   • Practice mindfulness. It sounds woo-woo, but it works. Deep breathing or short meditation can help reset your mindset.

   Fun fact: Studies show that mindfulness can improve decision-making under stress. Who knew Zen could help with Z-scores?

4. Keep a Journal—Yes, Seriously
   Writing down your trades, thoughts, and emotions creates self-awareness. Over time, you’ll start to spot patterns—like how you tend to rush trades after a losing streak or hesitate after a big win.

   • Track your setups, outcomes, and, most importantly, your mindset.

   • Review your journal regularly. It’s like having a mirror for your trading habits.

   As Dr. Richard L. Peterson says:
   "Traders who journal are better at identifying emotional triggers and avoiding impulsive decisions."

5. Seek Support When You Need It
   Trading can be lonely, but you don’t have to do it alone. Join trading communities, seek mentorship, or even consult with a trading psychologist. Many prop traders benefit from performance coaching, which offers tools for managing stress and staying focused.

A Friendly Reminder

Drawdowns are part of the journey. They’re not a sign of failure—they’re a sign you’re in the game. What separates successful prop traders from the rest isn’t avoiding losses; it’s how they handle them.

So the next time your account takes a dip, remember this: You’re not alone, and you’ve got the tools to weather the storm. Stay disciplined, stay focused, and keep riding those waves.

After all, prop trading isn’t just about making money—it’s about mastering yourself.

As Dr. Steenbarger reminds us:
"Every trade is an opportunity to grow—not just your account, but your skills, discipline, and resilience."

EVENTS
Important Data Events - Week 47

Monday, November 18

Tuesday, November 19

Wednesday, November 20

Thursday, November 21

Friday, November 22

WEEKLY TRADING LEVELS
FUTURES INDICIES

Enjoy this list of levels that have been curated for you! These levels are some major support and resistance levels that have been identified as areas of interest.

Use them to guide your charting, happy trading! ☘️

PROPRIETARY FIRMS
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