Drawdown is the fall in account value from a previous high to a later low, usually quoted as a percentage of the peak. A balance that moves from ten thousand to eight thousand has a twenty percent drawdown. Losses recovered later still count as drawdown while they are open, and the percentage needed to climb back grows as the drawdown deepens.
Forex glossary
Drawdown
Related term
Risk-Reward Ratio
The risk-reward ratio compares what a trade risks to what it targets, usually written as something like 1:2 where the take-profit distance is twice the stop-los…
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