[{"data":1,"prerenderedAt":1201},["ShallowReactive",2],{"\u002Fglossary\u002Fwhat-is-position-sizing":3,"\u002Fglossary\u002Fwhat-is-position-sizing-related":257},{"id":4,"title":5,"body":6,"category":240,"date":241,"description":242,"draft":243,"extension":244,"meta":245,"navigation":246,"path":247,"related":248,"seo":253,"stem":254,"term":255,"updated":241,"__hash__":256},"glossary\u002F5.glossary\u002Fwhat-is-position-sizing.md","What Is Position Sizing? Formula and Lot Size Calculation",{"type":7,"value":8,"toc":232},"minimark",[9,19,24,27,38,41,47,55,58,81,88,94,98,101,109,113,129,132,147,151,159,189,193,224],[10,11,12,13,18],"p",{},"Position sizing is the decision of how large a trade to open, derived from how much of the account you are willing to lose if the trade fails. It converts a risk percentage into a lot size using two inputs: the distance to your stop and the value of one pip at that size. It is the single variable that determines an account's ",[14,15,17],"a",{"href":16},"\u002Fglossary\u002Fwhat-is-drawdown","drawdown"," profile, and it is chosen before the trade rather than discovered after it.",[20,21,23],"h2",{"id":22},"how-it-works","How it works",[10,25,26],{},"Three steps, in order.",[28,29,34],"pre",{"className":30,"code":32,"language":33},[31],"language-text","1. Risk amount   = Account balance × Risk %\n2. Pip value     = Contract size × Pip in quote currency × FX rate to account currency\n3. Position size = Risk amount \u002F (Stop distance in pips × Pip value per lot)\n","text",[35,36,32],"code",{"__ignoreMap":37},"",[10,39,40],{},"A worked example on a $10,000 account risking 1% per trade, with a 50-pip stop on EUR\u002FUSD, where one standard lot moves $10 per pip:",[28,42,45],{"className":43,"code":44,"language":33},[31],"Risk amount   = 10,000 × 0.01      = $100\nPosition size = 100 \u002F (50 × 10)    = 0.20 lots\n",[35,46,44],{"__ignoreMap":37},[10,48,49,50,54],{},"Widen the stop to 100 pips and the same $100 of risk buys 0.10 lots. The risk stays constant; the size adapts. That inversion is the whole idea, and it is why sizing and ",[14,51,53],{"href":52},"\u002Fglossary\u002Fwhat-is-a-stop-loss","stop-loss"," placement cannot be decided separately.",[10,56,57],{},"Three methods dominate in practice:",[59,60,61,69,75],"ul",{},[62,63,64,68],"li",{},[65,66,67],"strong",{},"Fixed lot."," Always 0.10 lots, whatever the stop or the balance. Simple, and the risk per trade drifts constantly as both change.",[62,70,71,74],{},[65,72,73],{},"Percentage risk (fixed fractional)."," The formula above. Risk stays proportional, so losses shrink in currency terms as the account falls — the mechanism that makes recovery arithmetically possible.",[62,76,77,80],{},[65,78,79],{},"Martingale progression."," Size increases after a loss to recover it. Wins are frequent and small, the equity curve looks immaculate, and the distribution of outcomes has a fat left tail that arrives all at once.",[10,82,83],{},[84,85],"img",{"alt":86,"src":87},"Doubling the lot size after every loss against a fixed fraction of equity: same win rate, same market, opposite outcomes","\u002Fimages\u002Farticles\u002Flot-progression.svg",[10,89,90],{},[91,92,93],"em",{},"Which one an account uses is readable from the lot sizes alone.",[20,95,97],{"id":96},"why-it-matters","Why it matters",[10,99,100],{},"Entries decide whether you win. Sizing decides whether you are still there for the next one. Two traders taking identical signals with identical stops produce identical win rates and completely different accounts, because one risked 0.5% and the other risked 8%.",[10,102,103,104,108],{},"Sizing is also where ",[14,105,107],{"href":106},"\u002Fglossary\u002Fwhat-is-leverage","leverage"," does its actual damage. High leverage is not itself risk — it is permission to take risk. The risk arrives when that permission is used to open a size whose stop distance implies a loss the account cannot absorb twice in a row.",[20,110,112],{"id":111},"what-the-data-shows","What the data shows",[10,114,115,116,119,120,124,125,128],{},"Sizing leaves its signature in the drawdown tail. Across the accounts published on ShowMyTrades that have trading history (August 2026) — accounts published here, not traders in general — ",[65,117,118],{},"38.2%"," have been ",[14,121,123],{"href":122},"\u002Fglossary\u002Fwhat-is-maximum-drawdown","more than 20% underwater"," at some point and ",[65,126,127],{},"17.6%"," have lost more than half their peak value.",[10,130,131],{},"A properly sized fixed-fractional account rarely reaches that last band. Losing 50% at 1% risk per trade requires roughly 69 consecutive losses. Accounts in that tail generally arrived another way: escalating size after losses, or a size chosen without reference to the stop at all.",[10,133,134,135,138,139,142,143,146],{},"Context for who is doing the sizing: the median autotrading share on these accounts is ",[65,136,137],{},"99%",", and ",[65,140,141],{},"53.9%"," run above 90% automated, against ",[65,144,145],{},"42.2%"," under 10%. On more than half of the published set, position size is a line in an EA's settings — configured once and never revisited as the balance moves.",[20,148,150],{"id":149},"where-you-see-it-on-showmytrades","Where you see it on ShowMyTrades",[10,152,153,154,158],{},"The ",[14,155,157],{"href":156},"\u002Ftools\u002Fposition-size-calculator","position size calculator"," runs the formula above with live prices, in your account currency, for percentage or fixed-amount risk and for stops expressed in price or pips.",[10,160,161,162,165,166,169,170,173,174,177,178,184,185,188],{},"On a published account page you can audit sizing rather than assume it. The ",[65,163,164],{},"trades table"," carries a ",[65,167,168],{},"Volume"," column showing the lot size of every individual trade, so a size that steps up after each loser is visible directly. ",[65,171,172],{},"Custom Analysis"," adds a ",[65,175,176],{},"Lot Size"," min\u002Fmax filter: set a floor above the account's normal size and see whether the surviving trades cluster immediately after losses, which is the martingale signature. ",[65,179,180],{},[14,181,183],{"href":182},"\u002Fguides\u002Ftrading-volume-analysis","Total Lots"," in the ",[65,186,187],{},"Advanced Statistics"," module gives the aggregate; across published accounts it stands at 1,724,575 lots traded.",[20,190,192],{"id":191},"common-misunderstandings","Common misunderstandings",[59,194,195,201,212,218],{},[62,196,197,200],{},[65,198,199],{},"\"Risking 2% means using 2% of my account.\""," No. 2% is the loss if the stop is hit. The margin the position occupies is a separate figure entirely, set by leverage.",[62,202,203,206,207,211],{},[65,204,205],{},"\"I risk 1% per trade, so my worst case is 1%.\""," Only with one position open. ",[14,208,210],{"href":209},"\u002Fglossary\u002Fwhat-is-correlation-risk","Five correlated positions"," at 1% each are one 5% trade wearing a disguise, and correlated pairs move together precisely when it hurts.",[62,213,214,217],{},[65,215,216],{},"\"No stop loss, so no risk to calculate.\""," Without a stop, the position size formula has no denominator — the risk is not small, it is undefined, and its true value is the margin call.",[62,219,220,223],{},[65,221,222],{},"\"Compounding means scaling up.\""," Fixed-fractional sizing scales both ways. Increasing lots after wins while holding them constant after losses is not compounding; it is a slow ratchet toward a drawdown you never sized for.",[10,225,226,227,231],{},"For the full set of risk and sizing tools and when each one applies, see ",[14,228,230],{"href":229},"\u002Fguides\u002Fforex-calculators-guide","the forex calculators guide",".",{"title":37,"searchDepth":233,"depth":233,"links":234},2,[235,236,237,238,239],{"id":22,"depth":233,"text":23},{"id":96,"depth":233,"text":97},{"id":111,"depth":233,"text":112},{"id":149,"depth":233,"text":150},{"id":191,"depth":233,"text":192},"Risk","2026-08-19T00:00:00.000Z","Position sizing turns a risk percentage into a lot size using your stop distance and pip value. The formula, the three common methods, and what bad sizing costs.",false,"md",{},true,"\u002Fglossary\u002Fwhat-is-position-sizing",[249,250,251,252],"what-is-drawdown","what-is-maximum-drawdown","what-is-a-stop-loss","what-is-leverage",{"title":5,"description":242},"5.glossary\u002Fwhat-is-position-sizing","Position Sizing","qP5mfGAxSuWSiccKuy0i_N8LQtpN2UHwOG-ZOVxOViU",[258,472,675,892],{"id":259,"title":260,"body":261,"category":240,"date":241,"description":462,"draft":246,"extension":244,"meta":463,"navigation":246,"path":52,"related":464,"seo":468,"stem":469,"term":470,"updated":241,"__hash__":471},"glossary\u002F5.glossary\u002Fwhat-is-a-stop-loss.md","What Is a Stop Loss? Types, Limits and Real Numbers",{"type":7,"value":262,"toc":455},[263,266,268,271,297,300,306,312,314,322,335,337,345,351,356,359,367,370,372,417,419,448],[10,264,265],{},"A stop loss is an order placed in advance to close a position at a specified price, capping the loss on that trade. It is a decision made before the trade is open and handed to the broker's server, which is the entire point: it removes the exit from the moment when you will least want to take it. It caps intent, not outcome — the fill can be worse than the level.",[20,267,23],{"id":22},[10,269,270],{},"Four variants cover almost everything in use.",[59,272,273,279,285,291],{},[62,274,275,278],{},[65,276,277],{},"Fixed stop."," A price level attached at entry and held on the broker's server. It survives a power cut, a crashed terminal and a lost connection, because it does not live on your machine.",[62,280,281,284],{},[65,282,283],{},"Trailing stop."," Follows price in the profitable direction and never moves back. It locks in gains and also turns winners into break-even trades in noisy markets. In MetaTrader the built-in version is managed by the terminal, so it only works while the platform runs — which is why EAs trail by modifying the server-side stop instead.",[62,286,287,290],{},[65,288,289],{},"Volatility-based stop."," Distance derived from current range, typically an ATR multiple, rather than a round number. The same 20-pip stop on EUR\u002FUSD and on gold is not the same risk.",[62,292,293,296],{},[65,294,295],{},"Time stop."," Exit after N hours or bars regardless of price. Rare, and underused.",[10,298,299],{},"Sizing follows from the stop, not the other way round:",[28,301,304],{"className":302,"code":303,"language":33},[31],"Position size = (Equity × Risk %) ÷ (Stop distance in pips × Pip value)\n",[35,305,303],{"__ignoreMap":37},[10,307,308,309,311],{},"Choosing a lot size first and then hunting for a stop that fits the margin is the most common way an account acquires an unbounded loss. The ",[14,310,157],{"href":156}," runs it in the correct order.",[20,313,97],{"id":96},[10,315,316,317,321],{},"A stop loss is a trigger, not a price guarantee. Once the level trades, the order becomes a market order and fills at the next available price. In a gap — a Monday reopen, a rate surprise, the Swiss franc in January 2015 — that price can be a long way past the level. The difference is ",[14,318,320],{"href":319},"\u002Fglossary\u002Fwhat-is-slippage","slippage",", and it has no ceiling. Only a guaranteed stop loss, sold by some brokers for a fee, fills at the stated price.",[10,323,324,325,329,330,334],{},"The deeper function is behavioural. Without a pre-committed exit, the decision to close a loser is taken while holding it — the worst possible moment. Everything downstream — ",[14,326,328],{"href":327},"\u002Fglossary\u002Fwhat-is-a-profit-factor","profit factor",", drawdown, whether a ",[14,331,333],{"href":332},"\u002Fglossary\u002Fwhat-is-a-margin-call","margin call"," ever arrives — is decided there.",[20,336,112],{"id":111},[10,338,339,340,344],{},"Across the public accounts on ShowMyTrades with trading history (August 2026), the ",[14,341,343],{"href":342},"\u002Fguides\u002Fwin-rate-is-not-an-edge","median win rate"," is 68.8% and the median profit factor is 1.28. These describe accounts published here, not traders in general.",[10,346,347],{},[84,348],{"alt":349,"src":350},"Median win rate of 68.8% beside a median profit factor of 1.28 across public ShowMyTrades accounts","\u002Fimages\u002Farticles\u002Fwin-rate-vs-payoff.svg",[10,352,353],{},[91,354,355],{},"Winning often and earning little is the pattern a pre-committed exit exists to break.",[10,357,358],{},"Read them together, because separately each one flatters. Nearly seven trades in ten close green, yet gross profit is only 1.28 times gross loss. Both hold at once only if losers are substantially larger than winners: at a 68.8% win rate, a 1.28 profit factor implies an average loss roughly 1.7 times the average win. (Two medians of two distributions — an illustration, not one measured account, though the direction is not in doubt.)",[10,360,361,362,366],{},"That is the signature of taking profits early and letting losses run, and it is the pattern a stop loss exists to prevent. It surfaces again in the median ",[14,363,365],{"href":364},"\u002Fglossary\u002Fwhat-is-the-sharpe-ratio","Sharpe ratio"," of 0.05: return per unit of volatility barely above zero. The median account closes 171 trades, so this is not a thin sample.",[10,368,369],{},"Nor is it hand-made. Median autotrading share is 99%, and 53.9% of these accounts run above 90% automation. A missing stop loss there is a missing line of code, applied identically to every trade the system takes.",[20,371,150],{"id":149},[59,373,374,383,393,402,408],{},[62,375,153,376,378,379,382],{},[65,377,164],{}," has an ",[65,380,381],{},"S\u002FL"," column showing the stop price recorded on each position, marked in red when the trade was actually closed by it. Hundreds of rows with an empty S\u002FL column means the account trades without pre-committed exits.",[62,384,385,388,389,392],{},[65,386,387],{},"Avg. Win"," and ",[65,390,391],{},"Avg. Loss"," in the advanced statistics. If Avg. Loss is a multiple of Avg. Win, stops are either absent or being moved.",[62,394,395,388,398,401],{},[65,396,397],{},"Worst Trade (P&L)",[65,399,400],{},"Worst Trade (Pips)",". The largest single loss the account has taken is the real stop loss, whatever the description claims.",[62,403,404,407],{},[65,405,406],{},"Expectancy",", shown in pips and account currency, is the per-trade average once wins and losses are combined — the number a high win rate cannot flatter.",[62,409,410,416],{},[14,411,413],{"href":412},"\u002Fglossary\u002Fwhat-is-average-trade-length",[65,414,415],{},"Avg. Trade Length",", in the same block, exposes the asymmetry: losers that last days and winners that last minutes.",[20,418,192],{"id":191},[59,420,421,427,436,442],{},[62,422,423,426],{},[65,424,425],{},"\"A stop loss guarantees my maximum loss.\""," It caps the trigger, not the fill. Gaps and thin books fill worse, sometimes far worse.",[62,428,429,432,433,231],{},[65,430,431],{},"\"Wider stops are safer.\""," A wider stop at the same lot size is a larger loss. Distance and size are one decision, not two — see ",[14,434,435],{"href":247},"position sizing",[62,437,438,441],{},[65,439,440],{},"\"Moving the stop gives the trade room.\""," Moving a stop away from price converts a defined loss into an undefined one. This single habit produces the Avg. Loss to Avg. Win gap above.",[62,443,444,447],{},[65,445,446],{},"\"My win rate is high enough that I do not need stops.\""," Backwards. The median account here already wins 68.8% of its trades and still only reaches a 1.28 profit factor.",[10,449,450,451,231],{},"For what to watch on your own record over time, see ",[14,452,454],{"href":453},"\u002Fguides\u002Ftracking-trading-performance","the guide to tracking trading performance",{"title":37,"searchDepth":233,"depth":233,"links":456},[457,458,459,460,461],{"id":22,"depth":233,"text":23},{"id":96,"depth":233,"text":97},{"id":111,"depth":233,"text":112},{"id":149,"depth":233,"text":150},{"id":191,"depth":233,"text":192},"A stop loss is a pre-committed exit order that closes a losing trade at a set price. Types, why it is not a guarantee, and what thousands of real accounts show.",{},[465,466,467],"what-is-position-sizing","what-is-a-profit-factor","what-is-slippage",{"title":260,"description":462},"5.glossary\u002Fwhat-is-a-stop-loss","Stop Loss","AAYa1iiPaOMw4kuu8v5SZJKK5hmXtrG8EOOybDzr9vg",{"id":473,"title":474,"body":475,"category":668,"date":241,"description":669,"draft":243,"extension":244,"meta":670,"navigation":246,"path":16,"related":671,"seo":672,"stem":673,"term":598,"updated":241,"__hash__":674},"glossary\u002F5.glossary\u002Fwhat-is-drawdown.md","What Is Drawdown? Definition, Formula and Real Numbers",{"type":7,"value":476,"toc":661},[477,480,482,485,491,494,497,530,532,535,541,546,549,557,559,565,580,583,585,607,622,624,654],[10,478,479],{},"Drawdown is the decline in an account's value from a previous peak down to a subsequent low, expressed as a percentage of that peak. It measures how far the account fell from its own best point, not how much it lost on any single trade. Because it accumulates, a 20% drawdown can be built out of forty small losses just as easily as out of one disaster.",[20,481,23],{"id":22},[10,483,484],{},"Every account carries a running high-water mark: the highest value it has ever reached. Drawdown is the distance below that mark at any given moment.",[28,486,489],{"className":487,"code":488,"language":33},[31],"Drawdown % = (Peak value − Current value) \u002F Peak value × 100\n",[35,490,488],{"__ignoreMap":37},[10,492,493],{},"The mark only moves up. When a new high is printed, the high-water mark resets to it and drawdown returns to zero. Until then, every day below the peak is a day in drawdown, whether the account is falling or grinding sideways.",[10,495,496],{},"Three distinctions decide what the number actually means:",[59,498,499,509,515],{},[62,500,501,504,505,508],{},[65,502,503],{},"Relative vs absolute."," Relative drawdown is the percentage above. Absolute drawdown, as MetaTrader reports it, is the fall below the ",[91,506,507],{},"initial deposit"," in currency — a completely different figure that can read 0% on an account currently 40% below its peak.",[62,510,511,514],{},[65,512,513],{},"Equity vs balance."," Equity drawdown counts floating losses on open positions. Balance drawdown counts only closed trades, so a loss that is never realised never appears in it.",[62,516,517,520,521,524,525,529],{},[65,518,519],{},"Current vs maximum."," Current drawdown is where the account sits today. The historical worst is ",[14,522,523],{"href":122},"maximum drawdown",", and it is the figure most ",[14,526,528],{"href":527},"\u002Fglossary\u002Fwhat-is-a-track-record","track records"," quote.",[20,531,97],{"id":96},[10,533,534],{},"Drawdown is the constraint that decides whether a strategy is investable, because losses and gains do not compound symmetrically. A 20% fall needs a 25% gain to get back to even. A 50% fall needs 100%.",[10,536,537],{},[84,538],{"alt":539,"src":540},"A 10% loss needs an 11.1% gain to undo it, 25% needs 33.3%, 50% needs 100%, 70% needs 233%","\u002Fimages\u002Farticles\u002Frecovery-asymmetry.svg",[10,542,543],{},[91,544,545],{},"Past 50%, the recovery is a bigger job than the loss that caused it.",[10,547,548],{},"It is also the number that removes people from the market. Almost nobody quits during a fast, violent fall — the emotion there is hope. They quit in month nine of a flat recovery. Depth is only half of it; duration is the other half, and it is invisible on a returns chart.",[10,550,551,552,388,554,556],{},"And drawdown is the direct output of ",[14,553,435],{"href":247},[14,555,53],{"href":52}," discipline, far more than of entry quality. Two traders with identical signals and different lot sizes produce identical win rates and completely different survivability.",[20,558,112],{"id":111},[10,560,561,562,231],{},"The figures below describe accounts published on ShowMyTrades. They are not a survey of traders in general. Across the published accounts that have trading history (August 2026), drawn from 15,436,464 synchronised trades, the median deepest drawdown ever reached is ",[65,563,564],{},"9.7%",[10,566,567,568,572,573,138,576,579],{},"Set that against what the same accounts earned. The median ",[14,569,571],{"href":570},"\u002Fglossary\u002Fwhat-is-time-weighted-return","time-weighted return"," is ",[65,574,575],{},"+3.2%",[65,577,578],{},"63.0%"," of them are positive over time. The middle account here therefore gave up roughly three times its eventual return in peak-to-trough decline along the way: the risk absorbed is larger than the result, and larger by a multiple rather than a margin.",[10,581,582],{},"That ratio, not the raw depth, is what makes a drawdown figure readable. A published claim of large gains beside a two- or three-percent drawdown is not impossible, but it sits at the outer edge of this distribution, and the rest of the account page is where an edge case has to be justified.",[20,584,150],{"id":149},[10,586,587,588,591,592,595,596,599,600,606],{},"On every published account page, the ",[65,589,590],{},"Account Stats"," panel carries two figures on consecutive rows, immediately below ",[65,593,594],{},"Avg Monthly %",": ",[65,597,598],{},"Drawdown",", measured on equity so floating losses on open positions are included, and ",[65,601,602],{},[14,603,605],{"href":604},"\u002Fglossary\u002Fwhat-is-drawdown-on-balance","DD on Balance",", measured on closed results only. Both are historical maxima rather than today's reading, and both come from the broker feed rather than from the account owner.",[10,608,609,610,612,613,616,617,621],{},"The charts module has a ",[65,611,598],{}," view that plots daily drawdown as bars over the life of the account. That is where the ",[91,614,615],{},"duration"," of a decline becomes readable instead of inferred, which no single headline percentage can convey. The ",[14,618,620],{"href":619},"\u002Ftools\u002Fdrawdown-calculator","drawdown calculator"," runs the recovery arithmetic on your own balance.",[20,623,192],{"id":191},[59,625,626,632,638,648],{},[62,627,628,631],{},[65,629,630],{},"\"Drawdown is my biggest losing trade.\""," It is not. It is a cumulative peak-to-trough path that can contain hundreds of trades, including winners.",[62,633,634,637],{},[65,635,636],{},"\"My drawdown went back to zero after I recovered.\""," Current drawdown did. Maximum drawdown never falls, by design — it stops a good quarter from erasing a bad one.",[62,639,640,643,644,231],{},[65,641,642],{},"\"Low drawdown means low risk.\""," On a young account it usually means untested. The median published account here has 171 closed trades; below a few hundred, ",[14,645,647],{"href":646},"\u002Fguides\u002Fhow-much-history-a-track-record-needs","a small drawdown is a sample size, not a risk profile",[62,649,650,653],{},[65,651,652],{},"\"Balance drawdown is the real one.\""," It is the flattering one. Grid and averaging-down systems keep balance drawdown small precisely by refusing to close losers.",[10,655,656,657,231],{},"For how drawdown reads alongside every other number on an account page, see ",[14,658,660],{"href":659},"\u002Fguides\u002Freading-a-trading-account-dashboard","how to read a trading account dashboard",{"title":37,"searchDepth":233,"depth":233,"links":662},[663,664,665,666,667],{"id":22,"depth":233,"text":23},{"id":96,"depth":233,"text":97},{"id":111,"depth":233,"text":112},{"id":149,"depth":233,"text":150},{"id":191,"depth":233,"text":192},"Metrics","Drawdown is the peak-to-trough fall in an account's value, in percent. Here is the formula, why it is cumulative, and what thousands of real trading accounts show.",{},[250,465,251,466],{"title":474,"description":669},"5.glossary\u002Fwhat-is-drawdown","DMQq_wxULyvtTewFH3EendlyxckASOfp4LLweDXbTKY",{"id":676,"title":677,"body":678,"category":240,"date":241,"description":884,"draft":243,"extension":244,"meta":885,"navigation":246,"path":106,"related":886,"seo":888,"stem":889,"term":890,"updated":241,"__hash__":891},"glossary\u002F5.glossary\u002Fwhat-is-leverage.md","What Is Leverage in Forex? Formula and Real Numbers",{"type":7,"value":679,"toc":877},[680,683,685,688,694,697,751,754,757,769,771,774,777,791,793,796,803,806,808,811,842,844,870],[10,681,682],{},"Leverage is the ratio between the size of a position and the capital required to hold it. A broker offering 1:100 lets you control $100,000 of currency with $1,000 of your own money set aside as margin. It is a borrowing facility, not a strategy: it changes how much capital a trade ties up, and nothing else about the trade.",[20,684,23],{"id":22},[10,686,687],{},"Margin is the deposit the broker freezes while a position is open. The arithmetic is short.",[28,689,692],{"className":690,"code":691,"language":33},[31],"Position value  = Contract size × Lots × Price\nRequired margin = Position value ÷ Leverage\n\nEffective leverage = Total open position value ÷ Account equity\n",[35,693,691],{"__ignoreMap":37},[10,695,696],{},"One standard lot of EUR\u002FUSD is 100,000 units. At 1.0850 the position is worth $108,500.",[698,699,700,716],"table",{},[701,702,703],"thead",{},[704,705,706,710,713],"tr",{},[707,708,709],"th",{},"Account leverage",[707,711,712],{},"Margin frozen",[707,714,715],{},"Cost of a 50-pip adverse move",[717,718,719,731,741],"tbody",{},[704,720,721,725,728],{},[722,723,724],"td",{},"1:30",[722,726,727],{},"$3,616.67",[722,729,730],{},"$500",[704,732,733,736,739],{},[722,734,735],{},"1:100",[722,737,738],{},"$1,085.00",[722,740,730],{},[704,742,743,746,749],{},[722,744,745],{},"1:500",[722,747,748],{},"$217.00",[722,750,730],{},[10,752,753],{},"The position is identical in all three rows. Leverage moved the margin, never the risk.",[10,755,756],{},"The number that actually describes exposure is effective leverage: the notional value of everything open divided by equity. A trader on a 1:500 account running 0.05 lots on $10,000 sits at 0.54:1 — less exposed than someone who paid cash for the same currency. A trader on a 1:30 account running 2.5 lots on the same $10,000 sits at 27:1, pressed against the ceiling the regulator set. The tier says nothing about either of them; the position size says everything.",[10,758,759,760,764,765,231],{},"Run it on your own instrument with the ",[14,761,763],{"href":762},"\u002Ftools\u002Fleverage-calculator","leverage calculator"," and the ",[14,766,768],{"href":767},"\u002Ftools\u002Fmargin-calculator","margin calculator",[20,770,97],{"id":96},[10,772,773],{},"High leverage does not lose money. It removes the constraint that used to stop you.",[10,775,776],{},"On a 1:30 account, $10,000 of equity caps you at about 2.7 standard lots of EUR\u002FUSD before margin runs out — the broker enforces a position-size ceiling on your behalf. On 1:500 the same $10,000 supports 46 lots. Nothing improved; a ceiling was removed.",[10,778,779,780,784,785,787,788,790],{},"The chain that empties accounts is always the same. Leverage permits a large position, the large position produces a loss too big to sit through, and the resulting drawdown demands a return arithmetic will not supply — ",[14,781,783],{"href":782},"\u002Fguides\u002Fmaximum-drawdown-explained","a 50% loss needs a 100% gain to get back to flat",". Leverage is where the chain starts, but the link that does the damage is size, which is why ",[14,786,435],{"href":247}," is the control worth having and the ",[14,789,333],{"href":332}," is the symptom rather than the cause.",[20,792,112],{"id":111},[10,794,795],{},"The 10,000+ accounts connected to ShowMyTrades (August 2026) sit across 703 distinct broker servers, on MT4, MT5, cTrader and TradeLocker. Effectively every leverage tier on the market is represented somewhere in that set, from a regulated 1:30 cap to offshore 1:500 and beyond.",[10,797,798,799,802],{},"The outcomes do not sort by tier. Across the public accounts with trading history, the median ",[14,800,801],{"href":122},"deepest drawdown"," is 9.7% — but 38.5% of them never went more than 5% underwater, while 38.2% gave back more than a fifth of their peak and 17.6% more than half of it.",[10,804,805],{},"Two groups of almost identical size, drawn from the same pool of leverage settings, ending an order of magnitude apart. What separates them is not what the broker permitted. These figures describe accounts published on ShowMyTrades, not traders in general, and within that population the variable that moved was size.",[20,807,150],{"id":149},[10,809,810],{},"The leverage the broker granted appears as a badge in the account page header, next to the broker name and the account currency. It is read from the terminal, not typed in by the owner.",[10,812,813,814,816,817,820,821,388,823,827,828,834,835,388,838,841],{},"What the trader did with it shows up elsewhere. ",[65,815,183],{}," in the advanced statistics is the ",[14,818,819],{"href":182},"cumulative volume actually traded",". ",[65,822,598],{},[65,824,825],{},[14,826,605],{"href":604}," in the account stats panel show what that volume cost at the worst moment — the first on equity including open positions, the second on closed balance only. The ",[65,829,830],{},[14,831,833],{"href":832},"\u002Fglossary\u002Fwhat-is-an-equity-curve","Equity Curve"," in the charts viewer plots ",[65,836,837],{},"Balance",[65,839,840],{},"Equity"," together, and the gap between the two lines is where an oversized open position hides until it is closed.",[20,843,192],{"id":191},[59,845,846,852,858,864],{},[62,847,848,851],{},[65,849,850],{},"\"1:500 is riskier than 1:30.\""," The account setting is not risk. Two accounts holding identical positions carry identical risk whatever the broker permits. Higher leverage only widens the range of sizes you are allowed to choose badly from.",[62,853,854,857],{},[65,855,856],{},"\"More leverage means more profit.\""," It means less capital tied up as margin. Profit and loss are set by position size and price movement, both unchanged by the tier.",[62,859,860,863],{},[65,861,862],{},"\"Free margin is spare buying power.\""," Free margin is the distance between you and a stop out. Spending it is how a manageable loss becomes a liquidation.",[62,865,866,869],{},[65,867,868],{},"\"My broker caps me at 1:30, so I am safe.\""," A regulatory cap limits maximum total size, not the risk on any single trade. An account can still be lost on one badly sized position well inside a 1:30 limit.",[10,871,872,873,876],{},"Every number above has a calculator behind it — see ",[14,874,875],{"href":229},"the guide to forex calculators"," for how they fit together.",{"title":37,"searchDepth":233,"depth":233,"links":878},[879,880,881,882,883],{"id":22,"depth":233,"text":23},{"id":96,"depth":233,"text":97},{"id":111,"depth":233,"text":112},{"id":149,"depth":233,"text":150},{"id":191,"depth":233,"text":192},"Leverage is the ratio between position size and the capital backing it. Here is the margin formula, a worked example, and drawdown data from thousands of accounts.",{},[887,465,250],"what-is-a-margin-call",{"title":677,"description":884},"5.glossary\u002Fwhat-is-leverage","Leverage","9fzrPGzcUcu5W9wxB-HAiIpCi3gDQHwpcPzkOAH6NtA",{"id":893,"title":894,"body":895,"category":668,"date":241,"description":1193,"draft":243,"extension":244,"meta":1194,"navigation":246,"path":122,"related":1195,"seo":1197,"stem":1198,"term":1199,"updated":241,"__hash__":1200},"glossary\u002F5.glossary\u002Fwhat-is-maximum-drawdown.md","What Is Maximum Drawdown? Formula and Recovery Maths",{"type":7,"value":896,"toc":1186},[897,904,906,909,915,918,968,974,991,993,996,1058,1061,1068,1070,1076,1082,1087,1098,1125,1127,1140,1153,1155,1181],[10,898,899,900,903],{},"Maximum drawdown is the largest ",[14,901,902],{"href":16},"peak-to-trough decline"," an account has recorded over its entire history, expressed as a percentage of the peak. It is the worst loss the strategy has actually inflicted, as opposed to the worst loss its owner expects. It never decreases: once printed, a 34% maximum drawdown stays at 34% through every subsequent new high.",[20,905,23],{"id":22},[10,907,908],{},"Walk the equity curve forward one point at a time, keeping the highest value seen so far. At each point, measure the fall below that running high. The maximum drawdown is the deepest fall found anywhere on the walk.",[28,910,913],{"className":911,"code":912,"language":33},[31],"MaxDD % = max over t of [ (Peak(0..t) − Value(t)) \u002F Peak(0..t) ] × 100\n",[35,914,912],{"__ignoreMap":37},[10,916,917],{},"The result depends entirely on which curve you walk, and ShowMyTrades publishes both.",[698,919,920,936],{},[701,921,922],{},[704,923,924,927,930,933],{},[707,925,926],{},"Metric",[707,928,929],{},"Measured on",[707,931,932],{},"Open positions counted?",[707,934,935],{},"What it tells you",[717,937,938,953],{},[704,939,940,944,947,950],{},[722,941,942],{},[65,943,598],{},[722,945,946],{},"Equity (balance + floating P&L)",[722,948,949],{},"Yes",[722,951,952],{},"The real fall in what the account was worth at that moment",[704,954,955,959,962,965],{},[722,956,957],{},[65,958,605],{},[722,960,961],{},"Closed balance only",[722,963,964],{},"No",[722,966,967],{},"The fall in realised results",[10,969,970,973],{},[14,971,972],{"href":604},"Balance drawdown"," is the more flattering figure, and it is flattering by construction: an unrealised loss is invisible to it. That is the mechanism behind grid, martingale and averaging-down systems — they keep the balance curve smooth by never closing losers.",[10,975,976,977,388,980,983,984,987,988,990],{},"So an account showing ",[65,978,979],{},"Drawdown 41%",[65,981,982],{},"DD on Balance 6%"," is not broken. It was 41% underwater while its closed results claimed a rough patch of 6%. The equity figure is the honest one, and the ",[91,985,986],{},"gap between the two"," is a description of the strategy. When the two sit close together, positions are being closed near the point where damage is taken — which is what a ",[14,989,53],{"href":52}," is for.",[20,992,97],{"id":96},[10,994,995],{},"Recovery is asymmetric, because the gain has to compound off a smaller base than the loss did.",[698,997,998,1008],{},[701,999,1000],{},[704,1001,1002,1005],{},[707,1003,1004],{},"Maximum drawdown",[707,1006,1007],{},"Gain needed to reach the old peak",[717,1009,1010,1018,1026,1034,1042,1050],{},[704,1011,1012,1015],{},[722,1013,1014],{},"10%",[722,1016,1017],{},"11.1%",[704,1019,1020,1023],{},[722,1021,1022],{},"20%",[722,1024,1025],{},"25.0%",[704,1027,1028,1031],{},[722,1029,1030],{},"30%",[722,1032,1033],{},"42.9%",[704,1035,1036,1039],{},[722,1037,1038],{},"50%",[722,1040,1041],{},"100.0%",[704,1043,1044,1047],{},[722,1045,1046],{},"70%",[722,1048,1049],{},"233.3%",[704,1051,1052,1055],{},[722,1053,1054],{},"90%",[722,1056,1057],{},"900.0%",[10,1059,1060],{},"Under 20% the asymmetry is a nuisance. Past 50% it becomes the dominant fact of the account: you have to double your money with the same strategy that just halved it.",[10,1062,1063,1064,1067],{},"Maximum drawdown is also the number that sets your practical leverage ceiling. If a system has historically drawn down 30%, running it at double ",[14,1065,1066],{"href":247},"position size"," implies a 60% drawdown you have no evidence you can sit through.",[20,1069,112],{"id":111},[10,1071,1072,1073,1075],{},"The numbers here come from accounts published on ShowMyTrades, not from traders at large. Across the published accounts that have trading history (August 2026), the median deepest drawdown is ",[65,1074,564],{},", and the spread around that median is wide in both directions.",[10,1077,1078],{},[84,1079],{"alt":1080,"src":1081},"Deepest drawdown across public ShowMyTrades accounts: 38.5% under 5%, 23.3% between 5% and 20%, 20.6% between 20% and 50%, 17.6% over 50%","\u002Fimages\u002Farticles\u002Fdrawdown-distribution.svg",[10,1083,1084],{},[91,1085,1086],{},"Median 9.7%, and the tail is longer than most published claims allow for.",[10,1088,1089,1090,1093,1094,1097],{},"At the far end, ",[65,1091,1092],{},"17.6% have fallen more than 50%"," below their peak and ",[65,1095,1096],{},"38.2% have been more than 20% underwater",". Roughly one account in six has therefore faced the 50% row of the recovery table above: a 100% gain required just to get back to level.",[10,1099,1100,1101,1104,1105,1108,1109,1112,1113,1116,1117,1120,1121,231],{},"The near end deserves the same scepticism: ",[65,1102,1103],{},"38.5%"," record a maximum drawdown under 5%. Some of those are genuinely conservative. Many are simply young. The median published account holds ",[65,1106,1107],{},"171 closed trades"," at a ",[14,1110,1111],{"href":412},"median trade length"," of ",[65,1114,1115],{},"2.4 hours","; on a sample that size, a small maximum drawdown records what has not happened yet rather than what cannot. A maximum drawdown is a claim about the tail of a distribution, and ",[14,1118,1119],{"href":646},"tails need history behind them"," — which is why the figure is only worth much on a ",[14,1122,1124],{"href":1123},"\u002Fglossary\u002Fwhat-is-a-verified-track-record","verified track record",[20,1126,150],{"id":149},[10,1128,153,1129,1131,1132,388,1134,1136,1137,1139],{},[65,1130,590],{}," panel on every published account page shows ",[65,1133,598],{},[65,1135,605],{}," on consecutive rows below ",[65,1138,594],{},", both derived from the broker feed rather than self-reported. Compare them first; the divergence is the fastest read on the page.",[10,1141,1142,1143,1145,1146,1149,1150,1152],{},"The charts module includes a dedicated ",[65,1144,598],{}," view, which plots daily drawdown as bars and so answers the question the headline percentage cannot: how ",[91,1147,1148],{},"long"," the account stayed below its high-water mark. A 25% drawdown recovered in seven weeks and a 25% drawdown still open fourteen months later print the identical number and are not the same account. The ",[14,1151,620],{"href":619}," runs the recovery table above against your own balance.",[20,1154,192],{"id":191},[59,1156,1157,1163,1169,1175],{},[62,1158,1159,1162],{},[65,1160,1161],{},"\"My maximum drawdown improved this year.\""," It cannot improve. It is a historical maximum, and a good year cannot un-print it.",[62,1164,1165,1168],{},[65,1166,1167],{},"\"The two drawdown figures should match.\""," They match only when positions are closed near the loss. A wide gap is the signature of held losers, not a data error.",[62,1170,1171,1174],{},[65,1172,1173],{},"\"Small max drawdown, low risk.\""," Not on a short history. Ask how many trades and how many months produced it before treating it as a risk measure.",[62,1176,1177,1180],{},[65,1178,1179],{},"\"Percentage drawdown and money drawdown are interchangeable.\""," A 30% fall on a $2,000 account and on a $200,000 account are the same risk profile and very different experiences — but only the percentage is comparable between accounts.",[10,1182,1183,1184,231],{},"For maximum drawdown in context with every other metric on a live account page, read ",[14,1185,660],{"href":659},{"title":37,"searchDepth":233,"depth":233,"links":1187},[1188,1189,1190,1191,1192],{"id":22,"depth":233,"text":23},{"id":96,"depth":233,"text":97},{"id":111,"depth":233,"text":112},{"id":149,"depth":233,"text":150},{"id":191,"depth":233,"text":192},"Maximum drawdown is the deepest peak-to-trough fall an account ever recorded. The formula, the recovery table, and the real spread across thousands of accounts.",{},[249,465,1196,466],"what-is-a-verified-track-record",{"title":894,"description":1193},"5.glossary\u002Fwhat-is-maximum-drawdown","Maximum Drawdown","ApNMddCmg0QCLnuOwuyL_buXf8nvEi3z-WICzHc5jDU",1787415692576]