{"id":9400,"date":"2026-09-10T07:39:05","date_gmt":"2026-09-10T07:39:05","guid":{"rendered":"https:\/\/quantstrategy.io\/blog\/jared-tendlers-approach-to-handling-trading-drawdowns-jared\/"},"modified":"2026-09-10T07:39:05","modified_gmt":"2026-09-10T07:39:05","slug":"jared-tendlers-approach-to-handling-trading-drawdowns-jared","status":"publish","type":"post","link":"https:\/\/quantstrategy.io\/blog\/jared-tendlers-approach-to-handling-trading-drawdowns-jared\/","title":{"rendered":"Jared Tendler\u2019s Approach to Handling Trading Drawdowns – Jared Tendler"},"content":{"rendered":"

Jared
\nUnderstanding Jared Tendler\u2019s Approach to Handling Trading Drawdowns – Jared Tendler<\/strong> is essential for any trader looking to achieve longevity in the markets. Rather than viewing a loss of capital as a purely financial failure, Tendler teaches traders to analyze drawdowns as a critical reflection of their current mental and technical baseline. By integrating these periods into a broader strategy for growth, as detailed in Mastering the Mental Game of Trading: A Comprehensive Guide to Jared Tendler\u2019s System<\/a>, traders can maintain emotional composure and prevent their “C-game” from dictating their actions during periods of high stress.<\/p>\n

Differentiating Between Technical and Mental Drawdowns<\/h2>\n

One of the primary pillars of Jared Tendler\u2019s Approach to Handling Trading Drawdowns is the ability to distinguish whether a loss is a result of market variance or a collapse in psychological discipline. A technical drawdown occurs when your edge is simply out of sync with current market conditions. However, a mental drawdown occurs when emotional volatility leads to poor decision-making, such as managing fear of missing out (FOMO)<\/a> poorly or abandoning your execution plan.<\/p>\n

To navigate this, Tendler suggests using a Mental Hand History<\/strong> to track the thoughts and emotions occurring during the drawdown. This allows you to see if your “C-game” is surfacing. If your technical strategy is sound but your execution is flawed due to stress, why your trading strategy fails without proper psychology<\/a> becomes painfully evident. By identifying these patterns early, you can implement a Pre-Market Routine<\/strong> to stabilize your mindset before the opening bell.<\/p>\n

Applying the Inchworm Concept to Financial Losses<\/h2>\n

In Tendler\u2019s system, progress is not linear; it moves like an inchworm. When you are in a drawdown, your “back end” (your worst mistakes) often starts to pull forward. To handle this effectively, you must focus on building trading discipline: the inchworm concept explained<\/a>. Instead of trying to hit “home runs” to recover losses quickly\u2014which often leads to revenge trading<\/a>\u2014you should focus on eliminating your worst mistakes and playing your “B-game” consistently.<\/p>\n\n\n\n\n\n
Strategy Phase<\/th>\nActionable Insight<\/th>\nMental Focus<\/th>\n<\/tr>\n
Evaluation<\/td>\nAnalyze the last 20 trades for emotional triggers.<\/td>\nSelf-Awareness<\/td>\n<\/tr>\n
Stabilization<\/td>\nReduce position size to lower emotional intensity.<\/td>\nCapital Preservation<\/td>\n<\/tr>\n
Recovery<\/td>\nFocus on execution quality over P&L outcomes.<\/td>\nProcess Discipline<\/td>\n<\/tr>\n<\/table>\n

Case Studies in Drawdown Management<\/h2>\n

Case Study 1: The Futures Scalper<\/strong>
\nA professional futures trader experienced a 15% drawdown over two weeks. Initially, he blamed “market noise.” However, by identifying his A-Game, B-Game, and C-Game<\/a>, he realized his drawdown was compounded by trading anxiety<\/a>. He used Tendler’s approach to scale down his size, which lowered the stakes and allowed him to regain his “A-game” focus without the paralyzing fear of further loss.<\/p>\n

Case Study 2: The Crypto Swing Trader<\/strong>
\nA crypto trader hit a significant drawdown during a flash crash. Instead of panic-selling or doubling down, she utilized developing a pre-market routine<\/a> to assess her emotional state. By recognizing that her desire to “get even” was a symptom of her C-game, she stepped away from the screens for 48 hours, a key tactic in the psychology of scaling your trading size safely<\/a> during recovery phases.<\/p>\n

Conclusion<\/h2>\n

Ultimately, Jared Tendler\u2019s Approach to Handling Trading Drawdowns<\/strong> transforms a period of financial loss into a period of psychological gain. By utilizing tools like the Mental Hand History and the Inchworm concept, traders can prevent a technical dip from becoming a mental catastrophe. Developing emotional intelligence in professional futures<\/a> or equities trading is the only way to ensure that you remain objective when the markets turn against you. For a deeper dive into these strategies, refer back to the full guide on Mastering the Mental Game of Trading: A Comprehensive Guide to Jared Tendler\u2019s System<\/a>.<\/p>\n

Frequently Asked Questions<\/h2>\n
    \n
  • How does Jared Tendler define a drawdown differently than traditional finance?<\/strong> Tendler views drawdowns as a “stress test” for a trader’s mental game, focusing on how emotional reactions (like anger or fear) degrade decision-making quality rather than just looking at the equity curve.<\/li>\n
  • Should I stop trading entirely during a drawdown?<\/strong> Not necessarily. Tendler often recommends scaling down size to a level where emotions are manageable, allowing you to work through the “mental hand history” in real-time without risking significant capital.<\/li>\n
  • What is the most common mistake traders make during a drawdown?<\/strong> Revenge trading is the most frequent error. Traders try to jump back into their A-game by taking excessive risks, which Tendler identifies as a failure to respect the “back end” of the inchworm.<\/li>\n
  • How do I know if my drawdown is a “mental” one?<\/strong> If you find yourself deviating from your written trade plan, hesitating on entries, or feeling physical symptoms of anxiety, your drawdown has moved from a technical variance to a mental game issue.<\/li>\n
  • How does the A-B-C Game model help in a drawdown?<\/strong> It helps you identify that your current performance is likely your “C-game.” By recognizing this, you can stop trying to perform at your peak and instead focus on making your C-game less destructive.<\/li>\n
  • Can a pre-market routine really help recover from a drawdown?<\/strong> Yes. A structured routine helps stabilize the mind, ensuring that the emotional “residue” from yesterday’s losses doesn’t bleed into today’s execution.<\/li>\n
  • Is emotional intelligence actually relevant to futures or high-frequency trading?<\/strong> Absolutely. In fast-moving markets, the speed at which emotions can trigger poor decisions is accelerated; high emotional intelligence allows for faster “re-centering” during volatility.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"Understanding Jared Tendler\u2019s Approach to Handling Trading Drawdowns – Jared Tendler is essential for any trader looking to…\n","protected":false},"author":1,"featured_media":9399,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[69,40,43],"tags":[],"class_list":{"0":"post-9400","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-book-bites","8":"category-strategy_backtesting","9":"category-trading-psychology"},"yoast_head":"\nJared Tendler\u2019s Approach to Handling Trading Drawdowns - 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