Profit is only half the story. Drawdown shows how deep losses went on the way.
What is drawdown?
Drawdown is the fall from a peak in account value to a later low. If an account goes from 10,000 to 8,000, the drawdown is 20%.
Why recovery is harder
A 20% loss needs a 25% gain to get back. A 50% loss needs 100%. Deep drawdowns are hard to recover from.
How to read results
- Always look at maximum drawdown next to the profit.
- Check how long the history is.
- Be careful with results that show only wins.
This is general education, not advice.