satishmgodbole posted:
can someone explain what is drawdown? is this u booked losses? if this is then it means the performance is really bad? is this right? I am new to this and am thinking of investing the minimum. hence the question.
my consultant told me that this drawdown is a way to hide losses. so book or square of transactions which are in profit , to show Great returns. the loss making transactions are hidden in this drawdown. is this so?
A drawdown is the reduction of one’s capital after a series of losing trades. This is normally calculated by getting the difference between a relative peak in capital minus a relative trough. Traders normally note this down as a percentage of their trading account.
Consider this example:
Let’s say you have a $100,000 and you lose $50,000. What percentage of your account have you lost?
The answer is 50%.
Simple enough.
This is what traders call a drawdown.
You can see here Exential group system totally out of control in this case.
this is high risk trading without risk management, also same time return side is still stuck on lower side