Drawdown and "room to drawdown", explained
Return tells you how much you made. Drawdown tells you how rough the ride was. Here is what it means and why traders watch it.
Updated Oct 31, 2026
Basahin sa FilipinoWhat is a drawdown?
A drawdown is how far your account has fallen from its highest point.
Highest point (peak): $11,000 Now: $10,200 Drawdown: $800 (−7.3% from the peak)
What is the maximum (biggest) drawdown?
The largest drop from any peak to the low that followed it, over a period. It shows the worst stretch you lived through.
- 1Your account climbs from $10,000 to a peak of $12,000.
- 2It falls to $9,600 before recovering.
- 3Biggest drawdown: $12,000 → $9,600, which is −$2,400 or −20%.
What does "room to drawdown" mean?
Some trading games and funded-trader challenges set a loss limit, for example "the account fails if it drops $1,000 below its peak". Room to drawdown is how much more you can lose before you hit that limit.
| Limit | Current drawdown | Room to drawdown |
|---|---|---|
| $1,000 | $200 | $800 |
| $1,000 | $900 | $100: one bad trade away |
Why do some leaderboards divide return by drawdown?
To reward steady trading over lucky all-in bets. Two traders can end with the same return after very different rides.
| Trader | Return | Biggest drawdown | Return ÷ drawdown |
|---|---|---|---|
| Steady | +20% | −5% | 4.0 |
| All-in | +20% | −40% | 0.5 |
Same profit, but the steady trader took far less risk to get it.
Where do I see my drawdown on Tradeground?
Tradeground Pro’s portfolio analytics show your biggest drop from a peak. Leaderboards rank by return for now.