Drawdown

What Is Risk Management?

Risk management is the process of controlling how much can be lost on one trade and across a sequence of trades. It helps keep one mistake from becoming an account-threatening problem.

Drawdown, Losing Streaks and Risk of Ruin

Drawdown measures the decline from a previous equity peak. Large drawdowns become progressively harder to recover from, which is why risk control matters across losing streaks.

Drawdown is the decline from a previous account or equity peak to a subsequent low.