Drawdown measures consecutive losses from a peak to the lowest point. A drawdown period starts at a peak value, continues through a decline, and ends only when a new peak is reached.
Understanding Maximum Drawdown
Maximum drawdown represents the largest loss from trading activity since a fund's creation. It's calculated based on cumulative return changes and updates every hour.
The calculation includes both closed and open positions because it's based on equity. A high maximum drawdown typically signals greater risk of capital loss.
What This Means for You
Maximum drawdown helps you assess the risk profile of a fund. Funds Managers with lower maximum drawdowns generally demonstrate more conservative risk management, while higher values may indicate more aggressive trading strategies.