What is a Drawdown?
Emmanuel
A drawdown is the percentage drop in your account balance from its highest point to its lowest point during a given period. It measures how much you lost during a bad stretch before recovering. Example: Your account is at ₦100,000. It grows to ₦130,000. Then it falls back to ₦104,000. Your drawdown is (₦130,000 − ₦104,000) ÷ ₦130,000 = 20%. Even though your account is still higher than where you started, the drawdown measures from the peak.
Why does drawdown matter? Because a large drawdown is psychologically difficult to recover from — and mathematically harder than most people realise. A 50% drawdown requires a 100% gain just to break even. A 20% drawdown requires a 25% gain. This is why Edgeworth emphasises traders with LOW drawdown in the Edge Score system.
On Edgeworth, you can set a maximum drawdown limit for your overall account and a separate drawdown limit for each individual trader you follow. When a limit is reached, trading automatically stops to protect your remaining capital.
