What is drawdown?

Drawdown - the percentage of insured deposits, which can be lost when there is the band lost transactions. This is the maximum size of the losses, which may undergo deposit trader at any time or period of time.

The band lost transactions or strip loss - the period of consecutive losses without making profitable deals.

You can find the term "drawdown" in the description of the online forex trading system. Before you rely on any trading system, traders need to know what the biggest loss, he could face when he starts to lose because of changes in the market, which will lead to a temporary deterioration in the efficiency of the trading system.

Eg., If a trader has staked 5 000 U.S. dollars, and later lost 2 500, drawdown will be 50%.

Another example: you can hear that the efficiency of the currency trading system is 80% (which in itself implies that the remaining 20% being losses). Here is what one can predict the trader, it is the sequence in which he will receive benefit and undergo a loss. Will he enter 8 successful and 2 unsuccessful transactions every time? Maybe he will have 10 consecutive unsuccessful transactions, and then 3 successful? It is not possible to predict in advance.