A drawdown is any losing period during an investment. It is defined as the percent retrenchment from an equity peak to an equity valley. A drawdown starts with the beginning of an equity retrenchment and continuous until a new equity high is reached. (a drawdown encompasses both the period from the equity peak to the equity valley (length) and the time from the equity valley to the new equity high (recovery)). Maximum Drawdown is then the greatest cumulative percentage decline in equity.