Drawdown

A drawdown is the peak-to-trough decline in the value of a portfolio or trading strategy over a specific period. It measures how much a strategy loses from its highest point before recovering. Maximum drawdown (MDD) is the largest single peak-to-trough decline on record — and is one of the most important metrics for evaluating any trading system, alongside risk-adjusted returns and the Sharpe Ratio.

Managing drawdown requires a defined stop loss on every trade, consistent position sizing, and the discipline not to increase risk after losses.

One-Signal publishes full MDD data transparently across all asset classes. Measured from their respective start dates — SPX from 1987, Gold and Silver from 1990, Oil from 2007, and BTC from 2014 — the One-Signal solutions consistently show significantly lower maximum drawdowns than buy-and-hold futures positions in the same assets. For example, Oil futures showed a maximum drawdown of -125.90% over the period, while the One-Signal Oil solution recorded -41.95%. BTC futures showed -87.36% versus -36.40% for the One-Signal BTC solution.

This reflects the core benefit of a rules-based, sentiment-driven framework: structured exits and defined risk parameters limit the depth of losses during adverse market conditions. View our full performance and drawdown data: one-signal.com/performance. Not financial advice. Past performance does not guarantee future results.

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