Drawdown measures how far you have fallen from your highest point. If you reached $12,000 and dropped to $10,200, your drawdown is $1,800, or 15%.
Recovering from a drawdown is not symmetric. Lose 20% and you need 25% to get back. Lose 50% and you need 100%. That is why protecting capital matters more than winning fast.
It is not the number: it is whether you will keep trading the same way after living through it. Almost nobody quits from losing money; they quit from losing confidence. A drawdown that pushes you to double your lot size to recover is a drawdown that will cost you the account.
On a funded account it is also a hard rule: the firm closes you when you hit the limit. That is why Onyx Guardian warns you before, with margin.
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