Drawdown, the number nobody publishes

The distance from a peak balance to the lowest point that follows it, before a new peak is reached. It is the depth of the worst hole, not the final position.

Final figures are cumulative and smooth; the path there is not. A profitable season is a saw-tooth, and the teeth are the part that decides whether anybody is still betting by the end of it.

Drawdown is a function of stake size as much as of strike rate. The same selections at half the unit produce half the drawdown and half the profit, and only one of those two halves is what breaks people.

Here is the catch. Published records show the final figure and never the path, which makes every strategy look calmer than living with it feels. It is the single largest gap between a record and an experience.

What to do with it. Before starting, decide the drawdown you can sit through without changing anything, and set the unit size from that rather than from the target return.