Drawdown stages: green, yellow and red playbooks

[FXS London Scalper]

Having a pre-defined response to different drawdown levels removes guesswork.

Example stages (adjust to your account):

Green (0 to -3%):
- Normal trading.
- Normal size.

Yellow (-3% to -6%):
- Reduce size by 50%.
- Only A-grade setups.
- Daily review of trades.

Red (below -6%):
- Stop live trading.
- Review all trades since the drawdown started.
- Demo or minimum size until a set number of trades meet the rules.
- Return to yellow, then green, step by step.

Why stages?
- Drawdowns cause emotional pressure. A plan decided in advance avoids rash decisions.
- Size reduction protects capital.
- Review identifies whether the drawdown is variance or a problem.

What stages do you use? What triggers a full stop?