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Drawdown Calculation Discussion
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Member Since Jan 24, 2010 44 posts
Victory Markets, LLC (mlollar)
Jul 15 2010 at 14:09
Hi,
I'm not sure that your drawdown calculation is correct. My biggest drawdown happened recently and was about $700 on a $30k account and my drawdown calculation jumped to 19.2%. It was actually about 1.92% instead. So if you could please double check my math and let me know I'd appreciate it. Check http://www.myfxbook.com/members/mlollar/splitdecision-live/14794 The World's Currency Market is Our Oyster. |
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Member Since Dec 19, 2009 87 posts
Fill or Kill (cateful)
Jul 15 2010 at 16:47
Happens to my account too. It seems to me that the way myfxbook calculates drawdown is by measuring the peak-to-trough distance. In this case, the distance is your percent return difference. Not the best way to measure a drawdown I would say.
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Member Since Jan 24, 2010 44 posts
Victory Markets, LLC (mlollar)
Jul 15 2010 at 17:32
I see, and I agree. Drawdown should be represented as a percentage of the overall dollar value of the account at the time of the drawdown rather than a percentage of a percentage.
The World's Currency Market is Our Oyster. |
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Member Since Jun 23, 2010 300 posts
Winsor Hoang (www.ctsforex.com) (winsor)
Jul 16 2010 at 18:06
cateful posted: the way myfxbook calculates drawdown is by measuring the peak-to-trough distance. In this case, the distance is your percent return difference. People who trade without stop loss will always get very high winning percentage; however, the risk in their accounts is also very high. The drawdown is reflected by measuring peak to trough distance. Learn how to trade manually first before you start coding! |
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Member Since Aug 10, 2010 55 posts
Zebra (zebra)
Aug 11 2010 at 04:05
We obviously need two types of Drawdown.
1.) For Your Closing Loss - The Drawdown damage of that Losing trade 2. Equity Drawdown - The Swing Percentage from when you Open a position and when you close a Position. Display a Simple Candle for each Trade. Open- High- Low- Close. Now we have an accurate way to determine who has a High Risk appetite and who is willing to close at a Loss. Many systems are scared to have a Loss, Therefore their Drawdown percentage does not reflect the True Equity Drawdown. Zebras may look identical. However, this Zebra is extraordinary |
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