Those who trade understand that drawdowns are unavoidable. Where there is risk, there are losses; they are a natural pair.

In simple terms, a drawdown means that the money in your account has decreased. It's just that simple and direct.

How is it calculated specifically? In fact, there are many opinions in the industry, but the essence is similar - you have to define a time period to look at. It may be calculated annually or quarterly; in any case, there needs to be a reference period. What about the slight differences between different definitions? They are negligible; the core logic is the same.