Glossary
Drawdown
Drawdown is the peak-to-trough drop in your account equity — a key measure of how much risk a strategy takes.
Drawdown measures how far your account equity falls from a high point to a low point before recovering. A strategy that returns 30% but suffers a 50% drawdown along the way is far riskier than one with the same return and a 10% drawdown.
When judging an Expert Advisor or a copy-trading provider, look at maximum drawdown — not just the headline return. A large drawdown can be unbearable to sit through, or end an account entirely.
Related terms
Back to the full MT4 & forex glossary. Trading is high-risk — see our risk warning.