Drawdown

Drawdown is the peak-to-trough decline in account equity, measured as a percentage. A 10% max drawdown rule means if your account peaks at $10,000, you can't let equity drop below $9,000. Funded prop challenges (FTMO, MyForexFunds, etc.) almost always have a hard drawdown cap.

Drawdown control is what separates pros from gamblers. Risk per trade should always be sized so that 5 consecutive losses don't exceed your max drawdown. Most blown accounts come from either oversizing OR refusing to stop trading during a drawdown — both lethal.