Drawdown
The peak-to-trough decline of an account or a stock — how far it has fallen from its high, a core measure of risk.
Drawdown measures the drop from a high-water mark to a subsequent low, in percent. For an account it captures the worst losing stretch; for a stock it shows how far it's pulled off its highs. It's the number that tests a trader's discipline.
Drawdowns are asymmetric to recover: a 20% drawdown needs a 25% gain to get back to flat, a 50% drawdown needs 100%. That math is the whole argument for cutting losses early and sizing risk so no single trade or streak can dig a hole you can't climb out of.
On StockSetups
By shipping a stop with every setup, StockSetups caps the drawdown on each trade before the recovery math turns brutal; the percentage-gain calculator shows exactly how much a given loss takes to recover.
Related terms
See drawdown on tonight's board.
StockSetups scans the whole US market after the close and draws the patterns, levels and indicators on every chart.
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