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# how does myfxbook calculate drawdown?

kanon103
Jun 04 2014 at 08:29
99 posts
Im trying to find out how does DD on myfxbook works.

and is it avg DD or max DD?

a formula would be nice

much thanks!

Jun 04 2014 at 09:24
1718 posts
Drawdown is calculated from peak-to-valley based on both equity and balance, since inception.

Drawdown can only increase.

Formula should be something like that:
If (Equity < 0 and Equity/Balance*100 > Actual Drawdown) => So Drawdown is updated with the new value.

Jun 04 2014 at 09:24
1718 posts
Yes DD is max recorded.

TheCyclist
Jun 04 2014 at 11:43
724 posts
And it's also completely in-accurate. MT thing. Industry thing apparently....

DD should be current equity vs highest equity, or lowest vs highest equity.

However, they have a second method which is more correct. The DD tab. It's different to how DD is calculated in the systems main page, you'll see the figure is different. I use that one, more accurate.

kanon103
Jun 04 2014 at 13:34
99 posts

so you mean when trades are floating it starts new record the DD right? does not matter how many trades.

on the right side DD tab only record trades that closed negative?

TheCyclist
Jun 05 2014 at 05:07
724 posts
Calculation 1:

Highest Balance - Equity

Calculation 2 I think is:

Highest Equity - Current Equity.

You'd have look at their blog to see what it really is.

https://blog.myfxbook.com/2012/02/20/equity-based-drawdown-new-metrics/

kanon103
Jun 05 2014 at 06:52
99 posts
much thanks

tigpips
Jun 19 2014 at 12:03
186 posts
Drawdown is calculated from peak-to-valley based on both equity and balance, since inception.

Drawdown can only increase.

Formula should be something like that:
If (Equity < 0 and Equity/Balance*100 > Actual Drawdown) => So Drawdown is updated with the new value.

Thanks for sharing man

http://www.freeforexrebates .info
Ali Atie (aatie)
Jun 27 2014 at 21:12
5 posts
DD = Max(balance(t) - equity(t)) / balance(t)

Go to: https://www.myfxbook.com/members/aatie/squatjumps5-account1/958093

you will see that t = 18 March 2014 and that Max(balance(t) - equity(t)) = 2250 and balance(t) = 11500

so the DD = 2250/11500 = 19.6

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Creator of "Squat Jump" conservative Forex trading strategy