Drawdown is the drop from an account's peak equity to a subsequent trough, measured as a percentage. It shows how deep the losing stretches go.
How traders use it
- Deeper drawdowns need far larger gains to recover.
- Control it with position sizing and stops.
- Max drawdown is a key measure of strategy risk.
See it in dtcharts
Test your risk plan risk-free in the dtcharts terminal with paper trading.