Risk exposure

The percentage that the security declined from the entry point. If the draw-down is to much before rallying, it indicates that the random movement of the market was more likely responsible for a winning trade then the skill of the analyst. It quantifies the relative risk exposure. Managing risk is much more important than the overall gain.

At any point in time there will always, out of a few million forex traders, be a few that achieve 1500% gain. There is nothing remarkable about this, because like as in poker, there will always be a few winning the game with a full house. Without knowing the draw-down one can't quantify the risk the trader exposed himself to.

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