The strategy provider proceeded to withdraw USD 200 and equity is USD 1 000 now.The strategy provider earned USD 200 in profits, so the strategy equity became USD 1200.A strategy had a starting equity of USD 1 000.The vertical metric shows strategy balance, while the horizontal metric shows the steps outlined below. Let’s take a look at this formula in action: Get maximum from Drawdown 1 and Drawdown 2 An example of maximum drawdown Max drawdown metric is generally calculated as such:ĭrawdown 1 = (Equity at the end of the drawdown 1 - Equity before the drawdown 1)/ Equity before the drawdown 1ĭrawdown 2 = (Equity at the end of the drawdown 2 - Equity before the drawdown 2)/ Equity before the drawdown 2 Note: Drawdown data is updated every hour. If the maximum drawdown is high, it is likely that the risk of losing capital is also high.ĭrawdown is displayed in the strategy overview and clicking on the information icon will show you a small description of the parameter. As cumulative returns are based on equity, the drawdown calculation will include closed and open orders. The drawdown will be calculated based on cumulative return changes. Maximum drawdown is defined as the biggest loss due to trading activity since the strategy’s inception. The drawdown is a measurement of a single consecutive loss from peak-to-trough, or in other words, a drawdown begins when a downturn begins and ends when an uptick is recorded.
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