Drawdown« Back to Glossary Index
Drawdown is a measure of peak-to-trough decline, usually given in percentage form. In trading, drawdown refers to the reduction in your trading account from a trade or a series of trades.
For instance, your trading account is initially at $10,000 then you lost $2,500 today and $2,500 the next day. Your account would then be at $5,000 and you would« Back to Glossary Index