Correct drawdown calculation vote results
Correct drawdown calculation Discussion
Jul 26, 2010 at 15:26
1,041 Views
5 Replies
forex_trader_6429
Member Since Jan 31, 2010
24 posts
Jul 26, 2010 at 15:26
(edited Jul 26, 2010 at 15:27)
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.
Member Since Jul 31, 2009
1444 posts
Jul 26, 2010 at 15:42
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.
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.
forex_trader_6429
Member Since Jan 31, 2010
24 posts
Jul 26, 2010 at 15:44
Not sure why, but my system shows 7.4% DD while the correct one is over 17%
forex_trader_7
Member Since Aug 01, 2009
941 posts
Jul 26, 2010 at 16:22
Because fx book doesn't use NAV figures for draw down.
I tend to write mine down otherwise I'd have no clue.
I tend to write mine down otherwise I'd have no clue.
Member Since Jul 31, 2009
1444 posts
Jul 26, 2010 at 16:24
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.
forex_trader_16563
Member Since Aug 10, 2010
55 posts
Aug 11, 2010 at 03:49
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.
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.
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