Intermediate
Drawdown
Pronunciation: DRAW-down
The drop from a peak in your account before it recovers.
Definition
Drawdown measures how far your account has fallen from its highest point. It is usually shown as a percentage or amount below the recent peak. Drawdown matters because it reflects the losing stretches you must sit through — managing it is often more important than chasing bigger returns.
Example
Your account reached 10,000, then dropped to 9,000 before recovering. That 1,000 dip is a 10% drawdown.
Related terms
Where you see this in the app
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