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How do you calculate Drawdown?

Mike Torres (305) 389-0170 (wealthsecrets)
Feb 06 2010 at 12:04
38 ieraksti
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

Ethan (Staff)
Feb 06 2010 at 12:07
1393 ieraksti
Mike, currently drawdown is calculation based on your balance and not equity since our systems don't calculate equity yet.

zyrt
Jun 10 2012 at 12:10
202 ieraksti
Hi, is still drawdown calculated on balance and not equity? Thanks

Ethan (Staff)
Jun 10 2012 at 12:54
1393 ieraksti

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


No, it is based on equity.

MetaCoder
Jun 10 2012 at 15:46
126 ieraksti

   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 ?

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zyrt
Jun 10 2012 at 19:19
202 ieraksti
Yes, seems it is based on balance... Ethan are you sure?

LK Wong
lkwong
Jun 11 2012 at 03:20
71 ieraksti
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 ?

uAxTG2
babakeni
Jun 11 2012 at 06:26
12 ieraksti
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.

Ethan (Staff)
Jun 11 2012 at 11:23
1393 ieraksti
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.

zyrt
Jun 11 2012 at 14:11
202 ieraksti
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

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