Drawdown
Drawdown — the fall in a bankroll from a peak to the lowest point that follows it.
Maximum drawdown is the largest such fall over a record. A bank that reaches +14 units, drops to −4, then recovers has a maximum drawdown of 18 units regardless of where it finishes.
drawdown(t) = max(equity[0..t]) − equity(t)Why it matters: it decides how large a bankroll a strategy needs, and it describes the experience of following it. A common rule is to hold 1.5–2× the historical maximum drawdown.
Common mistake: treating the historical maximum as the worst case. It is a sample minimum of the true worst case; a longer future sample will very likely exceed it.
Related
Check any of this against our record
Every signal CONSENSUS publishes carries the bookmaker odds fixed before the event starts and the settled result afterwards — including the drawdowns and the losing runs. The running total is on the front page and every entry is in the log.