Drawdown

Drawdown is how far an account falls from its highest value before it recovers, written as a percentage of that high. Max drawdown is the largest such fall over a period. TradeCorgi names the max drawdown the worst drop.

Example

An account grows from $10,000 to $12,000, then falls to $9,600 before recovering. The drawdown is 20%: $2,400 below the $12,000 high. The account is only 4% below where it started, but drawdown measures the fall from the peak, not from the start.

Why it matters

A strategy's result says how much it made over a period; its drawdown says how much it lost along the way. Two strategies can end at the same place while one falls 40% in the middle, and most people abandon that one at the bottom. Deep drawdowns are also slow to recover from: after a 50% fall, an account must double to get back.

How TradeCorgi uses it

TradeCorgi always shows the worst drop at the same size as the result, never in small print, next to the worst drop from simply holding the coin, because a strategy you abandon at the bottom never reaches the end of its backtest. Agents limit drawdown with a stop-loss on every position, a cap on open positions, a daily loss limit, and no leverage. On Pro, a portfolio limit caps combined losses across all agents.