Reading maximum drawdown: balance, equity and strategy samples
Understand drawdown percentages with a simple example, distinguish balance and equity, and read strategy records in their sample and source context.
Niubang editorial · Updated
Drawdown measures a decline from a peak
If a curve reaches 10,000 and later falls to 8,000, that decline is a 20% drawdown from the peak. Maximum drawdown is the largest such decline observed within a specified sample. Always check the period and measurement definition.
After a 20% drawdown, rising from 8,000 back to 10,000 requires a 25% gain. This arithmetic example explains percentages; it is not a forecast or a real strategy record.
Balance and equity answer different questions
Balance mainly reflects settled account changes; equity also reflects unrealized profit and loss on open positions. A strategy holding large unrealized losses may have a smooth balance curve while its equity has already declined.
When comparing records, check the definitions, time range and currency, including how deposits, withdrawals and imported data are handled. Similarly named metrics from different sources may use different calculations.
Historical samples do not define future risk
A short record may not cover many market conditions. Trade count, holding periods, data gaps and freshness affect how much the sample can tell you. Historical maximum drawdown is not a ceiling on future drawdown or loss.
On Niubang, read drawdown alongside source labels, track-record length and update times. Verify the record before reviewing access options. Published data is not investment advice or a promise of returns.