Drawdown

Drawdown is the decline from a peak to a subsequent trough in an account's equity or a strategy's cumulative return. It answers one question: how far below its best point is this thing right now? It's usually quoted as a percentage of the peak, and it's the general concept that specific rules like trailing drawdown and maximum drawdown are built on top of.

It helps to separate two levels. Account drawdown is the peak-to-trough drop in your actual balance, the thing prop firms watch and cap. Strategy drawdown is the peak-to-trough drop in a system's modeled equity curve, the thing you study before you trade it. Same math, different purpose: one governs whether you keep the account, the other tells you whether the approach is survivable.

Drawdown is the honest measure of pain. Two strategies can post the same yearly return while one grinds steadily and the other lurches through a 40% valley you'd never actually sit through with real money. The depth and duration of drawdown decide whether a system is tradeable in practice, regardless of how good its headline numbers look.

For futures and prop traders, drawdown is also the enforcement surface. Almost every funded-account rule — daily loss limits, trailing drawdown, maximum loss thresholds — is just a specific, hard-edged slice of the drawdown concept. Understanding drawdown as the parent idea is what makes those individual rules read as one coherent system instead of a pile of disconnected numbers.

MimikTrader surfaces drawdown as a tracked metric in your trading reports, so you can see how far each account has fallen from its equity peak over a period rather than only its net result. This lives in the analytics and reporting features, which are part of the Pro plan. It's a measurement view — the hard-enforcing rules built on drawdown (trailing drawdown, daily and weekly limits) are handled separately by the risk engine.