What is Max Drawdown?
Updated October 17, 2026
Max drawdown is the biggest peak to bottom drop an account or strategy has ever had.
Max drawdown is the worst stretch on record. It shows you how painful things got.
It's one of the most useful numbers on any trading track record.
Remember it's the worst so far, not the worst possible. The future can always be rougher.
Example
An account peaked at $5,000 and fell to $3,500 before recovering. Max drawdown is 30%.
Questions people ask
Why does max drawdown matter for copy trading?
It tells you how much you might have to sit through if you follow that trader.
Can backtests show max drawdown?
Yes, but live results are often worse than backtests.
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