Drawdown
Peak-to-trough equity decline. A strategy with 68% win rate can still have 20%+ drawdowns depending on position sizing and loss clustering. Managing drawdown is primarily a sizing problem, not a win rate problem.
How Sigmentum uses it
Maximum drawdown is the largest percentage decline from an equity peak to the subsequent trough before a new peak is reached. Sequence of returns matters enormously: six consecutive 2%-risk losses produce a 12% drawdown. The same six losses spread across 30 trades at 0.5% risk produce a 3% drawdown. The signals are identical; the sizing is different. This is why Sigmentum's default model targets 1.5–2% capital risk per trade.
Every Sigmentum signal shows the exact values — Drawdown and the other three inputs — in the AI reasoning breakdown. Free account, no credit card.
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