Drawdown chart
Shows how far below its past high the account was at each point.
The drawdown chart shows the whole path below previous highs, not just the single worst moment. When the account is at a new high, the value is zero; when it is below the high, the chart shows the depth of the fall.
It is used to see how long and how deep the account stayed underwater. Max drawdown gives one number, while the chart shows the shape: a fast drop and fast rebound, or a long recovery.
If the chart shows 10%, the account is 10% below its past high. Recovering from that drawdown takes about 11.1% growth because the base is smaller. A common mistake is to look only at the deepest point and miss that the account may have spent months below its high.
Example: the past high was $20,000 and the current value is $17,000. The gap is $3,000, or 15% of $20,000. The chart shows a 15% drawdown; when the value reaches $20,000 again, the line returns to zero.
How we compute it
For each equity/NAV point or index point without the impact of deposits and withdrawals, we track the running peak and show the fall from that peak as a percentage. The same basis as max drawdown is used, with SPY overlay when available.