Drawdown
Drawdown is the drop in your capital from a peak to the trough that follows, as a percentage. It measures how painful a strategy is.
If your account goes from €10,000 to €8,500 before recovering, you have suffered a 15% drawdown. It is always measured from the last high of the equity curve, not from your starting capital.
The trap is mathematical: the deeper the fall, the harder the climb back. A 10% loss needs an 11% gain to break even, a 25% loss needs 33%, and a 50% loss needs 100%.
Every strategy goes through drawdowns. What matters is knowing in advance how deep a drawdown you can accept, and cutting your size as you approach that limit.