Pin down the single worst peak-to-trough loss a strategy ever suffered.
What is maximum drawdown?
Maximum drawdown is the largest peak-to-trough percentage decline an investment suffers over a given period, measured before a new peak is reached. If a portfolio climbs to 130, sinks to 100 and then recovers, its maximum drawdown for that stretch is roughly −23%. It is a single, blunt summary of worst-case pain, widely used to compare downside risk across strategies that may share similar average returns.
Illustrative underwater curve for a choppy equity path; the deepest trough is the maximum drawdown. Synthetic data.
Averages flatter; extremes bite. Maximum drawdown zooms in on the worst moment in a track record — the deepest the account ever fell from a prior high. This tool charts a choppy equity path's underwater curve so you can see where the single largest loss occurred and reason about its severity.
Maximum drawdown reduces an entire loss experience to one number: the deepest trough relative to the preceding peak. That brevity is its strength and its weakness. It is invaluable for a quick worst-case comparison, but it says nothing about how often smaller drawdowns occurred, how long the worst one lasted, or whether the strategy has even recovered yet. A single alarming figure can also come from one unrepeatable event.
A drawdown is not truly over until equity reclaims its old peak. The recovery time — how many days, months or years that takes — is often more punishing than the depth itself. A −30% drawdown that heals in three months is easier to sit through than a −20% one that grinds sideways for two years. Reporting the maximum drawdown together with its recovery length gives a far fuller picture of downside risk.
Quadesto scans your equity series, tracks the running peak, and returns the largest percentage shortfall from any peak as the maximum drawdown. The underwater chart above marks where the deepest trough sits, and the figures embed into reports. The underwater chart above marks where the deepest trough sits, and the figures embed into reports.
Drop a CSV or JSON below and Quadesto builds this chart from your numbers — styled, computed, and embeddable in your reports and newsletters. Free, in your browser, nothing stored until you sign up.
Drop your CSV or JSON
Charted instantly in your browser · nothing stored until you sign up
Prefer to connect a live source? Create a free account to link FRED, Alpha Vantage, and more with your own API keys.
Explore all free financial tools, browse the finance glossary, or see how teams use Quadesto.