The maximum retracement refers to the maximum decline when asset prices fall from a high point in a certain period of time. Take the fund as an example. When a fund reaches the highest level of 100 yuan in a certain period of time, but falls to 20 yuan at the lowest level during that period, the maximum withdrawal of the fund is (100-20)/ 100 = 0.8 or 80%.

Maximum retracement is an important index to evaluate investment risk. Generally speaking, the smaller the maximum retracement, the more stable the investment value, which is similar to historical data. However, the greater the maximum withdrawal, the higher the risk-return ratio, so investors need to make a good risk assessment and formulate a reasonable investment strategy.

In the face of the biggest retracement, investors need to do a good job of risk control to prevent investment losses from being too fast. One way is to reduce risks through reasonable asset allocation strategies, such as asset diversification, controlling the proportion of individual assets and diversifying investments. In addition, for fund investors, choosing a fund with stable performance level and a senior management team is also an excellent investment method, which helps to reduce the maximum exit risk.