How Drawdowns Work

With every investment you make, oftentimes comes the risk of having drawdowns or setbacks. They say investments go up on stairs and go down in elevators, just as fast as something goes up is equally or more as fast on the way down. In this video, I want to talk about my personal experience with drawdowns. Without further ado, let’s get straight to it.

Welcome if you’re new to the channel. My name is Matt Jimenez, and I am an entrepreneur who has worked with the greatest minds in finance over the last several years. I’m here to pour into you guys everything that they’ve poured into me when it comes to investing.

Drawdowns are inevitable, and in fact, it is natural and completely normal for this to occur. In the early days when I was investing, there have been multiple times where I’ve made an investment that has gone up to over six figures. On all occasions that this happened, it took several months for the peak to happen and several weeks for the bottom to happen.

Unfortunately, this is the ebb and flow of markets. Oftentimes we never sell the top nor do we buy the bottom, but most of the time we end up holding through it all. This is something that I’ve learned the hard way when it comes to investing.

Now I’ve learned to take what’s on the table. Never be afraid to take profits. Everything that I do going forward, I always make sure to at least pull enough money to cover the initial investment. So if I’ve invested $5,000 in something, the first thing I want to do is be able to take $5,000 out of that investment to cover the initial investment. That way there’s no risk, and it is really just house money at that point. Win or lose, I’m here for it all.

Today I want to talk about my personal experience with the software, especially because I’ve had a couple of messages on Instagram. People ask me how the drawdowns are. In fact, I had one guy send me a screenshot saying, “Hey, I currently have a drawdown, and I’m curious. I don’t know how to explain this to my peers. I want to be able to explain that this is normal and it’s not actually what I’m experiencing.” So this video is here to address that. I thought it was a good idea, and in fact, what better way to explain this video through my own experience, which I will be going through in a screen share and showing you guys the overall performance of just the drawdown portion of the software. Let’s get to it.

Okay, so here we have the FED bot that I’ve been running. And if you haven’t been documenting this journey, just go ahead and hit the link that pops up right now, and you could watch the whole journey. So here is a bar chart illustrating the drawdown percentages on the overall account. The way the software works, it doesn’t actually close out losing trades. In fact, it scales in the larger the drawdown, which oftentimes returns in much larger profits. Yes, you heard that right…

Please visit How Drawdowns Work to watch the full video!

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