๐ Trading Words Explained #8
๐ Drawdown
๐ What is Drawdown?
Drawdown is the percentage drop in your trading account from its highest point (peak) to the lowest point (trough).
๐ For example:
If your account grows to $10,000 but then drops to $8,000,
youโve had a 20% drawdown.
โ ๏ธ Drawdowns show how much your account can shrink during losing periods.
๐ก Understanding drawdowns helps you:
Manage risk better
Stay emotionally prepared
Avoid panic selling
๐ฏ Every trader faces drawdowns โ the key is how you recover and keep going!
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