As for the 2nd point, I cannot agree that there is an actual difference, between the two accounts... Since you are not challenging for the higher ending balance, but for the highest ending % gain with the less % drawdown, using trades that are meaningful for which later will be able to provide explanations... the absolute numbers, ie ending balance, amount at risk and so on have nothing to do with the winner!
I guess I agree partially with your thinking on that. It's just that depending on the persons trading strategy, it can have a fairly large difference in the outcome.
If for example, I were to open 5 lots on a smaller account, and the market went against it for a while, the smaller account could be in danger of being blown where as the larger account would not unless it went twice as far into the negative profits. Basically 'IF' a small account and a large account opened the same trades and the same sizes, the larger account is at a clear advantage.
If I'm incorrect, please clarify this for me. Thank you. - David
Your example is right, however the equal position size on different account balance, means different risk/reward %.
In other words, if we make exactly the same trade in two accounts one of them being $5k and the other $10k, the position size of the $5k account should be 1/2 of the position size of the $10k. This way the all statistics for both accounts will be the same, same drawdown %, same gain/loss %, etc.
Normally, before opening a trade, the trader decides the stop loss level and depending on the % of the account's balance that he wants to risk on that specific trade, he adjusts the position size.
That's why I pointed out, that since in this specific competition we don't care about the final absolute balance of the accounts, but we only compare %gain and %drawdown, the actual account balance is irrelevant.*
*please keep in mind that there could still be a difference, however one that results from a psychological side. As I pointed out in one of my previous post to Master_Kiwa, when we are talking about real accounts with real money the account balance does matter, from psychological point though. Most traders would risk 50% or even 100% of their account on single trade if the account balance if the balance is $100, but there are very few out there feeling comfortable with risking 100% of a $100k account. A lot of scammers often open $10 real accounts and with a little luck they reach +500% gain in a month or less, they hide the account balance and they are advertizing themselves a gurus... However, I've never seen such an account though with $100k starting balance!!!
Anyway in our case, there is no such psychological aspect, since both accounts have a considerable amount of $ deposited.