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What is drawdown in investing?

What is Drawdown? Drawdown is the measure of how much an investment decreases in value from its highest point to its lowest point. It is typically used to evaluate the downside risk or potential loss an investor might experience in an investment or portfolio.

What is a drawdown & why is it important?

A drawdown is a peak-to- trough decline during a specific period for an investment, trading account, or fund. A drawdown measures the historical risk of different investments, compares fund performance, or monitors personal trading performance. It is usually quoted as the percentage between the peak and the subsequent trough.

What is a drawdown in asset management?

It is an important risk factor for investors to consider, becoming more important in asset management in recent years. A drawdown is commonly referred to as a percentage figure. For example, if the value of an investment portfolio declines from $10,000 to $7,000, then the portfolio has experienced a drawdown of 30%.

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Risk warning: Digital asset trading is an emerging industry with bright prospects, but it also comes with huge risks as it is a new market. The risk is especially high in leveraged trading since leverage magnifies profits and amplifies risks at the same time. Please make sure you have a thorough understanding of the industry, the leveraged trading models, and the rules of trading before opening a position. Additionally, we strongly recommend that you identify your risk tolerance and only accept the risks you are willing to take. All trading involves risks, so you must be cautious when entering the market.

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