What Is Drawdown?

The decline from an account's peak value to its lowest subsequent point, expressed as a percentage. Professional traders obsess over limiting drawdown because a 50 percent loss requires a 100 percent gain just to break even.

Related Terms

Risk Management The set of rules that keeps you solvent: risking a small fixed percentage per trade, using stop losses, limiting open exposure and avoiding revenge trading.
Position Size The total notional value of your trade, calculated as margin multiplied by leverage.

Where You Will Meet This Term

You will run into drawdown constantly on any futures exchange, from the order panel to the position dashboard. If you are still building your foundation, our guides on leverage, liquidation and risk management connect the vocabulary into an actual trading process, and the full glossary covers every other term you will encounter.