GLOSSARY · RISK & PERFORMANCE
What is Drawdown?
Drawdown is the drop from an account's peak value to its lowest point after that peak.
Maximum drawdown is the largest peak-to-trough decline. It's the number that ends trading careers and prop firm accounts, so serious traders plan around it before they plan profits.
EXAMPLE
An account grows to $55,000, then falls to $51,000 before recovering: a $4,000 drawdown.
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