FREE TRADING TOOL
Maximum drawdown calculator
Maximum drawdown is the largest observed decline from a prior equity peak to a later trough in the entered sequence. Order matters: sorting the values by size instead of time destroys the measurement.
Updated August 31, 2026 · Educational information onlyTHE FORMULA
Drawdown % = (peak equity − later trough equity) ÷ peak equity × 100
Enter positive equity values in chronological order, separated by commas, spaces, or new lines. The calculation does not infer dates, deposits, withdrawals, or cash flows.
WORKED EXAMPLE
See how the number is produced.
For 10,000 → 11,500 → 10,800 → 9,200 → 10,400, the largest decline is 11,500 − 9,200 = $2,300, or 20%, from the second observation to the fourth.
HOW TO READ IT
Interpret the result with context.
- Maximum drawdown measures the worst observed peak-to-trough path in the supplied sample.
- It does not show how long recovery took unless dates are analyzed separately.
- Deposits and withdrawals can create false drawdowns or recoveries unless the series is adjusted for cash flows.
COMMON MISTAKES
Keep the inputs consistent.
- Entering unordered balances rather than a chronological sequence.
- Mixing account deposits or withdrawals with trading performance.
- Calculating from individual trade P&L without a starting equity baseline.
- Treating historical maximum drawdown as a worst-case guarantee.
COMMON QUESTIONS
Maximum drawdown calculator FAQ
Can maximum drawdown be zero?
Yes. A sequence that never falls below a prior peak has zero observed drawdown.
Does maximum drawdown predict future loss?
No. It describes the entered history. Future paths can produce a larger or differently timed decline.