Drawdown

Drawdown is how far an account has fallen from its highest point.

It is measured in percent of the peak. A 25 percent drawdown needs a 33 percent gain to get back to level; a 50 percent drawdown needs 100 percent.

The deeper it goes, the harder the recovery, which is why position size matters more than any other setting.

Related terms

EquityRisk per trade

A definition, not financial advice. Trading carries a risk of loss.

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