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Drawdown
Maximum loss recorded from peak to trough over a given period.
Beginner-friendly explanation
Drawdown is the difference between the highest and lowest value of your portfolio or an asset, even if you didn’t sell. It shows how much value can drop before recovering.
Intermediate-level insight
Drawdown is a metric used to assess the real risk of a strategy. It measures the maximum loss during a period. Large drawdowns challenge both trader psychology and system robustness.
Advanced perspective
Drawdown is analyzed in several ways: maximum drawdown, average drawdown, recovery time. It’s essential in backtesting, algo evaluation, and robust portfolio construction.
Trading Basics
drawdown, loss, dip, recovery, performance, strategy, stability, evaluation
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