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What Is Drawdown

Drawdown is the number
that ends accounts.

Returns get the attention. Drawdown decides whether you are still trading next year. Here is what it is, the difference between maximum and daily drawdown, and the recovery math nobody wants to look at.

See the recovery math Track real drawdown
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The definition

It measures how deep the hole got.

Not where you ended. How far down you were at the worst point along the way.

Drawdown is the fall from a peak in your account equity to a later low, before a new peak is made. It is usually shown as a percentage of the peak.

Maximum drawdown is the largest such fall over the whole history of the account. It is the single best measure of how bad things got, and the one professional allocators look at before returns.

Daily drawdown is a cap on how much you can lose in one day. It is the rule that ends most funded and prop accounts, and it is breached far more often than the maximum.

Drawdown = (Peak Equity − Trough Equity) / Peak Equity

The recovery math

Recovery is not symmetric.

This single table is why controlling drawdown matters more than chasing returns. The gain needed to get back to even grows far faster than the loss.

Drawdown vs gain to recover
5% drawdown → 5.3% gain. Routine. Barely noticeable, recovers quickly.
10% drawdown → 11.1% gain. Normal. Most strategies see this regularly.
20% drawdown → 25% gain. Serious. The recovery is now visibly harder than the loss.
30% drawdown → 42.9% gain. Dangerous. Many accounts never make this back.
50% drawdown → 100% gain. You must double the remaining account just to get even.
70% drawdown → 233% gain. Effectively unrecoverable for most traders.
Why it matters

It is the constraint everything else lives inside.

Win rate, R:R and expectancy mean nothing if a drawdown ends the account before the edge plays out.

It caps your future

A deep drawdown does not just cost money. It removes the capital that the edge needs to compound, so the damage outlives the loss itself.

It ends prop accounts

Funded and prop firm accounts are governed by daily and maximum drawdown rules. Most failures are a drawdown breach, not a bad strategy.

It breaks discipline

The deeper the drawdown, the stronger the urge to oversize and revenge trade to recover, which is exactly what turns a recoverable dip into a terminal one.

The real problem

You cannot manage a number you never see.

Most traders only feel drawdown emotionally. They never see the actual curve until it is too deep.

No real tracking
Drawdown as a feeling.
You know you are down, not how far from the peak.
No equity curve, so no real maximum drawdown.
Prop firm limits breached without warning.
The dip becomes a hole before you react.
Tracker Fx
Drawdown as a number.
Equity curve built automatically from synced trades.
Maximum drawdown calculated, not estimated.
See the drawdown over any period you choose.
Pair it with risk per trade to find the cause.
Supported platforms

Your real drawdown, from your real equity curve.

Connect your account and the equity curve and drawdown are built automatically. No CSV files, no imports.

cTrader

Connects via the official cTrader API. Full history imports on connection and the equity curve updates on every trade.

Learn about cTrader →
Bybit

Connects via read-only API key (Bybit Global). Equity and drawdown tracked on Perpetuals and Spot, synced every 2 hours.

Learn about Bybit →
OANDA

Connects via the OANDA API. Forex, indices, commodities and metals with drawdown tracked from connection.

Learn about OANDA →
MetaTrader 4 & 5

Connects via API to any MT4 or MT5 broker. No plugins and no CSV exports - equity curve and drawdown synced automatically.

Learn about MetaTrader →
FAQ

Common questions.

Everything you might want to know about drawdown.

What is drawdown in trading?

Drawdown is the drop from a peak in your account equity to a later low, before a new peak is made. It is usually shown as a percentage. It measures how much you were down at the worst point, not just where you ended.

What is the difference between maximum and daily drawdown?

Maximum drawdown is the largest peak-to-trough fall over the whole history of the account. Daily drawdown is the most you are allowed to lose in a single day, a rule used heavily by prop firms. Breaching either is what ends most funded accounts.

Why is drawdown so important?

Because recovery is not symmetric. A 50% drawdown needs a 100% gain just to get back to even. The deeper the hole, the disproportionately harder it is to climb out, which is why controlling drawdown matters more than maximising returns. See risk management.

How does Tracker Fx track drawdown?

Tracker Fx builds your equity curve from synced broker trades and shows maximum drawdown and the drawdown over any period automatically, so you can see how deep you actually went rather than relying on memory. It pairs well with the position size calculator.

Is there a free trial?

Yes. Tracker Fx includes a 7-day free trial with full access to all journaling and analytics features. Card required, cancel anytime.

Stop feeling your drawdown.
Start seeing it.

Connect cTrader, Bybit, OANDA or MetaTrader and Tracker Fx builds your equity curve and calculates maximum drawdown automatically, so you act on the number before it becomes a hole.

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