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How do you calculate Drawdown?

Staff (Staff)
Jun 11 2012 at 14:31
1390 posts

   zyrt posted:
   Thank you,
If my DD is 10%
Then I make a deposit / I get a bonus / I do good trades and my equity/balance grow. Will the DD go down? Thanks


No, the drawdown figure is the maximal drawdown experienced since account's inception. If you wish to 'reset' the drawdown, you should use custom start https://www.myfxbook.com/help#help_17

zyrt
Jun 11 2012 at 14:33
202 posts
Ok, thanks, I dont want to reset it, just to understand how it works.

LK Wong
lkwong
Jun 11 2012 at 15:28
71 posts

   Staff posted:
   We log the maximal drawdown. Drawdown is calculated using several ways:
(1) logging of drawdown at each account update.
(2) calculation of balance drawdown
(3) calculation of equity drawdown based on historic prices (end of day)

The highest figure out of the above methods will be the one showing as the drawdown value, while drawdown chart shows end of day values.


Hi Ethan,

Thanks for your response. But what I'm looking at is quite frightening. On my main page, it says the system drawdown is 7.01%, but in the charts window, underdrawdown, it says that my most recent drawdown is 45.97%.

Do you think you could have a look at this for a moment for me ? Does the fact that my trading account is a mini account (10,000/lot) instead of a standard account (100,000/lot) make a difference ?

Thanks.

Staff (Staff)
Jun 12 2012 at 14:13
1390 posts

   lkwong posted:
   

   Staff posted:
   We log the maximal drawdown. Drawdown is calculated using several ways:
(1) logging of drawdown at each account update.
(2) calculation of balance drawdown
(3) calculation of equity drawdown based on historic prices (end of day)

The highest figure out of the above methods will be the one showing as the drawdown value, while drawdown chart shows end of day values.


Hi Ethan,

Thanks for your response. But what I'm looking at is quite frightening. On my main page, it says the system drawdown is 7.01%, but in the charts window, underdrawdown, it says that my most recent drawdown is 45.97%.

Do you think you could have a look at this for a moment for me ? Does the fact that my trading account is a mini account (10,000/lot) instead of a standard account (100,000/lot) make a difference ?

Thanks.


Fixed.

LK Wong
lkwong
Jun 12 2012 at 14:16
71 posts
Wow! Thanks for the quick response, Ethan ! Much appreciated !

d4amenace
Sep 07 2012 at 00:16
11 posts
Staff posted:

   zyrt posted:
   Thank you,
If my DD is 10%
Then I make a deposit / I get a bonus / I do good trades and my equity/balance grow. Will the DD go down? Thanks


No, the drawdown figure is the maximal drawdown experienced since account's inception. If you wish to 'reset' the drawdown, you should use custom start https://www.myfxbook.com/help#help_17


Just so I understand it better....The drawdown calculated in the maximal drawdown since inception in terms of open trade drawdown and not closed trade drawdown? right?

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