Max drawdown
Shows how much the account lost in its worst peak-to-bottom moment.
Max drawdown is the deepest fall from a previous account high to a later low. The everyday analogy is simple: the account climbed a hill, then slid down; drawdown shows how far it slid.
It is used to understand what historical hit to capital already happened. Return can be high, but if the path included losing half the account from a peak, the risk feels very different.
5-10% is usually read as a moderate drawdown, 20-30% as serious stress, and 50%+ means the account historically lost half of its peak value. Important: if the account later recovered, max drawdown does not disappear. It remains part of the risk record.
Example: the account grew to $12,000, then fell to $9,000. The loss from the peak was $3,000, and $3,000 / $12,000 = 25%. The max drawdown for that stretch is 25%.
How we compute it
For MT4/MT5, drawdown is measured on equity, including open P&L; for Exante/IBKR, it uses a NAV index without the impact of deposits and withdrawals. If the low depends on reconstructed points, that basis is disclosed.