--- title: "Max drawdown explained | RupeeCase" description: "Max drawdown is the deepest fall of the model from a running high to a later low. Where it appears, how it is computed and how to read it." source_url: "https://www.rupeecase.com/learn/terminal/max-drawdown" --- ## Watch: Max drawdown Each card shows the deepest fall in the model history.Max drawdown: how bad did it get? 5 chapters, 0:56, with voice and music 1. [Chapter 1Where it is0:18](/instiv2/media/tut3/max-drawdown-where-phone-dark-v3-va2.mp4) 2. [Chapter 2What it means0:06](/instiv2/media/tut3/max-drawdown-meaning-phone-dark-v3-va2.mp4) 3. [Chapter 3Worked example0:06](/instiv2/media/tut3/max-drawdown-example-phone-dark-v3-va2.mp4) 4. [Chapter 4How to read it0:15](/instiv2/media/tut3/max-drawdown-reading-phone-dark-v3-va2.mp4) 5. [Chapter 5Watch out0:10](/instiv2/media/tut3/max-drawdown-watch-phone-dark-v3-va2.mp4) Screens from the RupeeCase app on sample data. Strategy figures are model, back tested, as of the date on screen. Formula and example numbers are illustrative. Mark as watched 3In this screen ## Every button the video points at. A still from each chapter with its buttons and fields numbered. Pick a number to zoom in on it; hover the still for a close up; Esc shows the whole screen again. Sample data, no order is placed. **1**Where it is**4**How to read it ### Chapter 1: Where it is 1 Show the whole screen 1 Show the whole screen 1. 1**Max drawdown**Each card shows the deepest fall in the model history. Shown in the video, not on this still 2. 2**Over the chosen period** The key figures show it for the period you chose. Shown in the video, not on this still ### Chapter 4: How to read it 1 Show the whole screen 1 Show the whole screen 1. 1**Falls over time**The Risk tab draws every fall from the running high. Shown in the video, not on this still ## Where it is ScreenMarketplace and StrategyBasic On every Marketplace card, in the strategy key figures and in the Risk tab (Drawdowns card). Always shown in Basic. Index in this video: [Allcap](/strategies/allcap) (strategy page). ## What it means Max drawdown is the largest percentage fall from a high point of the model to a later low, before a new high. It says how deep a bad stretch went in the history. On the card it covers the full history; on the strategy page it covers the chosen period. ## The formula At every week, compare the value with the highest value so far. The deepest of those falls is the max drawdown. As computed in the RupeeCase app`Drawdown each week = value / highest value so far - 1 Max drawdown = the lowest of those weekly drawdowns (weekly model history)` ## Worked example Example only * The model rises from Rs 10,00,000 to Rs 15,00,000 * It then falls to Rs 12,00,000 before a new high * 12,00,000 / 15,00,000 - 1 = -20% max drawdown ## How to read it * Compare it with the NIFTY 50 figure under it, for the same period. * Ask whether you could hold through a fall that deep. * The Drawdowns card shows how long each fall lasted. ## Watch out * History can be beaten: a future fall can be deeper. * Weekly data misses falls inside a week. * "Max drawdown length" is the length of the deepest fall, not the longest one. ## Transcript Tap Sound on for voice and music. These are the captions of the video, chapter by chapter. 1. 0:00**Where it is.** Each card shows the deepest fall in the model history. 2. 0:18**What it means.** At every week, compare the value with the highest value so far. The deepest of those falls is the max drawdown. 3. 0:24**Worked example.** Worked example, example only: The model rises from Rs 10,00,000 to Rs 15,00,000. It then falls to Rs 12,00,000 before a new high. 12,00,000 / 15,00,000 - 1 = -20% max drawdown. 4. 0:30**How to read it.** The Risk tab draws every fall from the running high. 5. 0:46**Watch out.** Watch out: History can be beaten: a future fall can be deeper. Weekly data misses falls inside a week. "Max drawdown length" is the length of the deepest fall, not the longest one. ## Terms in this tutorial * [drawdown](/learn/glossary#drawdown)The peak-to-trough decline during a specific period. * [volatility](/learn/glossary#volatility)How much returns fluctuate. ## Learn it in depth * [Module 2.3: Risk Metrics That Matter8 min read, free](/learn/path-2/module-2-3-risk-metrics-that-matter) * [Module 4.5: Risk Management for Systematic Portfolios9 min read, free](/learn/path-4/module-4-5-risk-management) TKeep watching ## Next tutorial. 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