What does realised drawdown tell me about my trading journal?
By Chart Reporter Reviewed 2 min read
The short answer
Realised drawdown measures a decline from a prior peak in the recorded closed-trade P&L path. It describes that path and its ordering. It does not automatically capture intratrade floating losses, broker equity drawdown or a percentage of account capital.
Follow the selected P&L path
Take fictional cumulative outcomes of 0, 100, 70, 120 and 60 account units. The decline from the peak of 120 to 60 is a 60-unit realised drawdown. The result depends on the included outcomes and their chronological ordering.
Chart Reporter's cumulative net P&L is a realised-results series rather than a broker balance. The starting zero is a reference for the selected sample. Deposits and withdrawals are not closed-trade gains or losses, so they do not make this series a complete account equity history.
Identify what is outside the series
An open position can experience a large adverse move and later close with a small loss or gain. A closed-trade curve will reflect its final recorded outcome, not every floating value along the way. That limitation matters when discussing maximum exposure or live risk.
Likewise, converting a money drawdown into an account-equity percentage requires a trustworthy capital base and cash-flow convention. Dividing by a convenient current balance can misrepresent earlier conditions. Keep an unavailable equity percentage unavailable rather than manufacturing precision from missing history.
Use drawdown as a review starting point
Inspect the trades and periods that created the decline. Check whether one large result dominates it, whether different strategies overlap, and whether the selected history is complete. A date filter can start after an earlier peak, so a shorter-window drawdown may differ from the full-history figure.
Preserve the account currency, sample window and calculation basis in any report. Compare a recorded realised drawdown with simulations only when units and definitions match. A historical maximum is an observation from that history; it is not a ceiling on future losses or proof that unseen floating drawdown was smaller.
Sources and further reading
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