What Is Drawdown? Understanding and Surviving Losing Streaks

Drawdown is the decline from a peak in your trading account to a subsequent low, expressed as a percentage. If your account grows from $10,000 to $15,000 and then drops to $12,000, your drawdown is 20% ($3,000 from the $15,000 peak). Maximum drawdown is the largest peak-to-trough decline in your trading history.