The decline from an equity peak to the following trough, usually stated as a percentage.
Last verified 13 September 2026 · written by the DexLadder team
What it means
The decline from an equity peak to the following trough, usually stated as a percentage.
Why it matters when you trade
Drawdown is the honest measure of what a strategy costs to hold, because it is what you must sit through to collect the returns. The recovery maths is brutally asymmetric: −20% needs +25% to get back, −50% needs +100%, −80% needs +400%. Most abandoned strategies were not unprofitable; they were simply deeper in drawdown than their owner had imagined in advance.
Worked example
An account falling from $12,000 to $8,400 is in a 30% drawdown and needs +42.9% to make a new high.
See it on live markets
DexLadder runs drawdown against live market and pool data, with simulated capital, so you can watch it act on an order instead of reading about it — no account, no wallet, nothing installed.