Maximum Drawdown
Maximum drawdown is the largest observed decline from a peak to a subsequent trough over the period being measured.
Why it matters to you
Profitability alone does not describe the risk of a trading approach. Two strategies can produce similar returns while exposing traders to dramatically different drawdowns. Maximum drawdown helps show how severe the worst historical decline was.
Terms that sit next to this one
Recovery Factor
See the perpetuals front
The tools, the live market and the course.