All terms
Definition
Drawdown
Drawdown is the amount your trading account has decreased from its highest value.
Quick take
How far your account is from its peak.
Keep this in mind every time you see drawdown on the chart — context is everything.
Did You Know?
A 50% drawdown requires a 100% gain to recover — which is why protecting capital matters more than chasing returns.
Common Beginner Mistake
Trying to 'trade out of' a drawdown by sizing up. This usually deepens the hole instead of digging out of it.