In simple terms, “drawdown” in a brokerage account is like losing some of your money, even if it’s just temporary. Imagine you have $100 saved up, but then you spend $10 on something. Now you have $90, which is $10 less than you started with. That $10 loss is like a “drawdown.”
So in a trading account, drawdown is how much money you lose from the highest amount you had, usually because the value of the stocks or assets you bought went down. You haven’t necessarily lost it forever (just like you could save up the $10 again), but right now, you have less than before.
