Glossary
Terms, defined plainly
- DrawdownRisk
- A decline from a portfolio peak. Recovery requires a larger percentage gain than the loss.
- Lesson: Risk management and position sizing
- Recovery gainRisk
- Gain needed after a drawdown d to return to the peak: d ÷ (1 − d).
- Lesson: Drawdowns, losing streaks and risk of ruin
- Trailing drawdownFutures
- A provider-specific rule where the loss floor follows the account's peak at a fixed distance.
- Lesson: Funded-account (prop firm) rules: examples, not standards