How do you calculate Drawdown?

My Myfxbook says DD is: 17.54%

# +94.11%
# Abs. Gain: +94.06%
# Daily: 1.96%
# Monthly: 58.22%
# Drawdown: 17.54%
# Balance: $5821.73
# Equity: (60.87%) $3543.67
# Highest: (Feb 05) $5856.17
# Profit: $2821.73
# Interest:-$3.21
# Deposits: $3000.00
# Withdrawals:$0.00

How is the DD calculated? Because current open positions are: -$2,247.09 If you divide $2,247.09 into the starting balance of $3,000, you get 75% DD. If you divide -$2,247 into current balance of $5,821.73, you get 39%.

And to make matters more confusing in calculating DD, at one point I had a floating open of -$4,254 and caused a bunch of trades to margin out and close. So now if you divide -$4,254 into starting balance of $3,000, we are talking about 142% DD. And if you divide -$4,254 into current balance of $5,821, you get 73%.

So as you can see, 1) I really don't know how to calculate DD? 2) I don't know how Myfxbook calculates DD?

Any help would be appreciated.

Thanks so much.

Mike

Mike, currently drawdown is calculation based on your balance and not equity since our systems don't calculate equity yet.

Hi, is still drawdown calculated on balance and not equity? Thanks

   zyrt posted:
   Hi, is still drawdown calculated on balance and not equity? Thanks

No, it is based on equity.

   Staff posted:
   

   zyrt posted:
   Hi, is still drawdown calculated on balance and not equity? Thanks

No, it is based on equity.

DId you mean to say its is based on Balance ?

Yes, seems it is based on balance... Ethan are you sure?

Not sure if I'm posting in the right place, but my drawdown numbers don't look correct either. Does myfxbook take into account that some accounts are mini accounts, while others are standard accounts ?

Account type shouldn't affect calculation of DD. As per Metatrader, DD is the highest percentage ratio of loss per trade to balance in the last number of trades closed. I think myfxbook considers equity as sometimes it tallies with Metrader's and sometimes it doesn't.

We log the maximal drawdown. Drawdown is calculated using several ways:
(1) logging of drawdown at each account update.
(2) calculation of balance drawdown
(3) calculation of equity drawdown based on historic prices (end of day)

The highest figure out of the above methods will be the one showing as the drawdown value, while drawdown chart shows end of day values.

Thank you,
If my DD is 10%
Then I make a deposit / I get a bonus / I do good trades and my equity/balance grow. Will the DD go down? Thanks

   zyrt posted:
   Thank you,
If my DD is 10%
Then I make a deposit / I get a bonus / I do good trades and my equity/balance grow. Will the DD go down? Thanks

No, the drawdown figure is the maximal drawdown experienced since account's inception. If you wish to 'reset' the drawdown, you should use custom start https://www.myfxbook.com/help#help_17

Ok, thanks, I dont want to reset it, just to understand how it works.

   Staff posted:
   We log the maximal drawdown. Drawdown is calculated using several ways:
(1) logging of drawdown at each account update.
(2) calculation of balance drawdown
(3) calculation of equity drawdown based on historic prices (end of day)

The highest figure out of the above methods will be the one showing as the drawdown value, while drawdown chart shows end of day values.

Hi Ethan,

Thanks for your response. But what I'm looking at is quite frightening. On my main page, it says the system drawdown is 7.01%, but in the charts window, underdrawdown, it says that my most recent drawdown is 45.97%.

Do you think you could have a look at this for a moment for me ? Does the fact that my trading account is a mini account (10,000/lot) instead of a standard account (100,000/lot) make a difference ?

Thanks.

   lkwong posted:
   

   Staff posted:
   We log the maximal drawdown. Drawdown is calculated using several ways:
(1) logging of drawdown at each account update.
(2) calculation of balance drawdown
(3) calculation of equity drawdown based on historic prices (end of day)

The highest figure out of the above methods will be the one showing as the drawdown value, while drawdown chart shows end of day values.

Hi Ethan,

Thanks for your response. But what I'm looking at is quite frightening. On my main page, it says the system drawdown is 7.01%, but in the charts window, underdrawdown, it says that my most recent drawdown is 45.97%.

Do you think you could have a look at this for a moment for me ? Does the fact that my trading account is a mini account (10,000/lot) instead of a standard account (100,000/lot) make a difference ?

Thanks.

Fixed.

Wow! Thanks for the quick response, Ethan ! Much appreciated !