Max drawdown is the biggest fall from a high water mark to the next low in your equity curve. If your account peaks at €50k, drops to €38k, and then climbs to a new high, your max drawdown was €12k or 24%. It's not the same as your worst trade — it's the worst cumulative damage before you recovered. Once you set a new equity peak, the drawdown clock resets.
Account peaks at €50,000 in March. By June it sits at €41,000 — the lowest point before the curve makes a new high.
What traders actually live with: - Under 10% — boring on purpose. Most institutional risk frameworks cap here. - 10% to 20% — normal range for an active retail strategy with reasonable position sizing. - 20% to 35% — aggressive. Sustainable only if your edge is real and your psychology is steel. - Above 35% — you're not running a strategy, you're gambling. The math of recovery breaks down: a 50% drawdown needs a 100% gain just to get back to even.
A second number matters just as much: drawdown duration. A 15% drawdown that recovers in three weeks is annoying. A 15% drawdown that drags on for nine months is the one that makes traders quit.
Max drawdown is the metric you check before you scale up size. If you couldn't sleep through last year's worst stretch, doubling position size will only double the drawdown. It's also how you sanity-check a backtest: a system that looks perfect on the equity curve but had a 40% drawdown in 2022 isn't a system you can run with real money.
TradeOnyx shows your max drawdown in the Overview tab in three flavours, side by side: the absolute euro value (so you feel the actual money), the percentage of peak equity (so you can compare it across account sizes), and the drawdown duration in days (so you know how long the recovery took). All three update automatically with every closed trade — no manual logging, no Excel.
Use the duration number to spot the slow-grind drawdowns that win-rate alone hides. A strategy with 60% wins can still grind through a four-month flat stretch — TradeOnyx surfaces that gap directly so you see the friction your equity curve actually went through, not just the highlights.