Petri Redelinghuys

Drawdown is when your account shrinks as a result of losing trades or trades that stopped out. Your account stays in drawdown until it is back to the level that it was when the drawdown started. Practically, if your account started at 100k and grew to 120k, clearly you’ve been doing great. If your account shrinks back down to 110k, then your account is in drawdown and remains in drawdown until it breaches 120k again.

It’s important to remember a 20% drawdown requires a 25% growth to get back to break even.