Forex glossary

Maximum drawdown in Forex

A clear definition of Maximum drawdown, with practical context for reading markets and making better trading decisions.

Level 6 · Manage Risk and ReactionsRisk management

Definition

The deepest peak-to-trough decline over a chosen period. It is a key survival metric for a trading plan or prop-firm rule set.

If an account once fell 12% from its highest value, its maximum drawdown is 12%.

Understanding Maximum drawdown helps traders interpret market information, plan decisions, and manage risk with more context.

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