Maximum drawdown: how deep can your account fall
Profit tells you where you ended up. Drawdown tells you how painful the road was — and whether you could have stayed on it.
What drawdown is
Drawdown is the fall of your account (or cumulative PnL) from its previous peak. Maximum drawdown is the deepest such fall over a period:
Max drawdown = (peak − lowest point after it) ÷ peak.
Example: the account grew to 12,000, then dropped to 9,000 before setting a new high. Max drawdown = 3,000 / 12,000 = 25%.
Why it matters more than it seems
Losses and recoveries are not symmetric:
- −10% needs +11% to recover
- −25% needs +33%
- −50% needs +100%
- −75% needs +300%
A deep drawdown is not just a number — it is weeks or months of trading needed to get back, often under pressure that leads to more mistakes.
Drawdown in money vs in percent
A journal that does not know your deposit can show drawdown of cumulative PnL in money and as a share of the peak PnL. Deposits and withdrawals distort percentage drawdown on the account balance, so it is worth looking at both.
See these numbers for your own trades
Connect an exchange and your trades load automatically — PnL, fees and funding per trade. The demo works without signing up.
How to keep it under control
- Fix the risk per trade (for example 0.5–1% of the account).
- Set a daily loss limit and stop trading for the day when it is hit.
- Cut size after a series of losses instead of increasing it to win back.
- Check which coins, hours or setups produce the drawdowns — it is rarely random.
In CheckMyProfit
The equity curve shows cumulative PnL with fees and funding, and the dashboard shows the maximum drawdown for the chosen period. The Telegram bot can warn you when your daily loss passes a limit you set.