There is only one type of drawdown, to my knowledge. If you give me some time to explain, I think you will understand what I mean by claiming there are “2”.

When you have a demo account with fake money, the drawdown you see allows you to witness how a bot or system works. If it does well, you may want to add it to your arsenal. When the bot performs poorly, you will unlikely add this tractor to the family farm. If the bot stresses you out as it makes its money, it will frustrate you, too.

• This system involves many trades with a total drawdown of over $33,000. If all the trades were closed right now, the account would be worth less than $75,000. This is scary to me!
• This system had grown my demo account by 5.5% in 2.5 days. This system can work. I am still watching and learning.
• When the margin level in trading accounts reaches 400%, it is a danger point. This bot still has room, but it is at 749% here.

You have different feelings when you already own the bot. Skin in the game raises your interest a great deal.

How do I deal with the bot that has “real” money in the account?

• I keep the account size low. This account has just over $20,000 in it. If the open trades continue to go badly, this is the most that is at stake. If all the open trades were closed, I would have over $16,000 left.
• When it is “fake” money, you can look at the trades and go, “Sure glad that isn’t my money.” When it is real money, the best strategy is not to look as often. Trust the bot…until it loses your trust. You get my trust with smaller accounts, and you might get a bigger one!
• I have to trust the testing the vendors subjected the bot to BEFORE they sell it. The Aviator 2 doesn’t make trades every day. When it makes them, it doesn’t mind waiting for its price. The University of Options doesn’t sell “flashy” bots, but they are effective.

Bottom Line: Drawdown is a teacher. When it involves real money, it is a REALLY good teacher.