To use chat, please login.
Back to contacts

Correct drawdown calculation vote results

Do you like this suggestion?

Yes No

Correct drawdown calculation Discussion

LuckyBastard
LuckyBastard
Jul 26 2010 at 15:26
24 posts
Mine and other brokers use small deposits/withdrawals of just a few cents or dollars to make up for little differences or to add VPS reimbursement etc. The problem is that it messes up the drawdown calculation (reported it as a bug, then I was told it's supposed to be like that though, which is weird). Would be great if the software ignored little deposits/withdrawals, say <$20, as those are just corrections - drawdown is one of the most critical attributes of a trading system.

Ethan (Staff)
Jul 26 2010 at 15:42
1392 posts
Well, we can't just ignore deposits/withdrawals less than $20 since these might be valid deposits/withdrawals with those amounts which we must account for when calculating the drawdown.

Funds movement doesn't skew the drawdown calculation, but actually averages it out as the base balance on which the drawdown calcualtion is based of is always re-adjusting.

LuckyBastard
LuckyBastard
Jul 26 2010 at 15:44
24 posts
Not sure why, but my system shows 7.4% DD while the correct one is over 17%

Elkart
Elkart
Jul 26 2010 at 16:22
941 posts
Because fx book doesn't use NAV figures for draw down.

I tend to write mine down otherwise I'd have no clue.

Ethan (Staff)
Jul 26 2010 at 16:24
1392 posts

LuckyBastard posted:
    Not sure why, but my system shows 7.4% DD while the correct one is over 17%


If that is based on equity, then we don't calculate equity yet, so drawdown is based on balance.

Zebra
zebra
Aug 11 2010 at 03:49
55 posts
True Drawdown, is the decrease in Equity. If the Equity swings down 10% before the trade recovers and gets closed at a Profit, then the True Drawdown is 10% even though the Trade Turned a Profit. Therefore, We can never Determine HOW ACCURATE a System is...

Myfxbook only calculates a Drawdown from a Losing Trade and does not account for a Real and True Drawdown in Equity.

This needs to be addressed.

Please login to comment .