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Dangerous and misleading drawdown calculations vote results

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Dangerous and misleading drawdown calculations Discussion

scalpguy
Nov 25 2011 at 10:19
15 posts

When are you going to fix up the drawdown calculations?

By calculating the DD only at the point of closing the positions is deadly wrong ! Between the open and close time the position can be allmost wiped out and still you show the DD risk for example only 2.5% :)

This is VERY MISLEADING !

Calculations must be done continuously during the time when positions are open. By doing this you can also provide another important values such a 'MAE' and 'MFE'.

Everything else in your service is EXCELLENT and usable. Thank you very much for providing this kind of service.

SG


rob559
Dec 22 2011 at 21:38
1916 posts
I THINK YOU ARE CONFUSING DD AND FLOATING

femtotrader
Jun 04 2012 at 14:10
10 posts
Hello,

I also found that calculating
MAE(Maximum Adverse Excursion) and MFE(Maximum Favourable Excursion) could be very useful

There is 2 way to calculate MAE / MFE : on client side or on server side

Maybe the Myfxbook EA could calculate MAE and MFE and publish it on the website
or as scalpguy said calculate it on the server side.

I see that Mt4i has MAE MFE graph
They say MAE/MFE data is approximate but I don't know if they get this value on MT client side or on the server side.

After getting MAE/MFE you could draw

MAE_pips = f(outcome pips)
MAE_pips = f(MFE_pips)
MAE_pips = f(MFE_currency)

You could also draw a kind of candlestick plot
Each clandlestick is a trade
open = 0
close = outcome_pips
min = MAE
max = MFE

I also consider that floating operation should be considered.

Regards

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