Financial Glossary
Max Drawdown
The biggest drop from a peak to a trough. If your portfolio drops from €10 000 to €7 000, the max drawdown is 30 %.
Explanation
Maximum Drawdown (MDD) = (peak − trough) / peak. It is a measurement of the record, not a cap the model guarantees: protection comes from the guardrails (VIX, SMA200, credit spread).
Technical detail
Largest historical drop in the backtest. Used alongside guardrails like VIX Shield and SMA200 Floor to frame risk.
See also
Educational content. Not investment advice. Past results do not guarantee future returns.