Drawdown measures a consecutive loss from peak to trough. Simply put, a drawdown period begins at a peak, continues through a decline, and ends when a new peak is established.
Maximum drawdown represents the most significant loss from trading activity since a fund's inception. It's calculated based on cumulative return changes and updated hourly.
The drawdown calculation includes both closed and open orders since it's based on equity. A high maximum drawdown typically indicates a higher risk of capital loss.