The psychological impact of a prop firm's fixed drawdown is different from your own capital. When it's 'not your money' it's easy to be reckless, but the hard stop of a blown account forces discipline. Conversely, it can make traders too conservative and miss opportunities. Finding that balance is key.
Totally agree with the psychological aspect. It's a double-edged sword: the fear of blowing the account can paralyze you, but it also prevents the kind of emotional trading that can wipe out personal capital.
I've found the 'not your money' idea to be a myth for myself. If anything, the pressure to maintain the account makes me even more cautious than with my own funds. The fixed drawdown is a constant reminder of the rules.
Interesting point about being too conservative. I definitely feel that sometimes, especially if I'm close to a daily drawdown limit. It's tough to pull the trigger on a good setup if it means risking the day's progress.
The balance is definitely key. I think prop firms force you to develop a much stronger risk management plan than most personal accounts, simply because the consequences of not having one are so immediate.