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Trading glossary

What is Drawdown?

Risk ManagementBeginner

Drawdown is the peak-to-trough decline in your account value, expressed as a percentage. If your account drops from £10,000 to £8,000, that's a 20% drawdown. Understanding drawdown is critical because a 50% loss requires a 100% gain just to break even.

Related terms: Max Drawdown Risk Per Trade Win Rate

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