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Forex Forum → Expert Advisor Studio → Max Drawdown - Calculation clarification

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Posts: 3

Topic: Max Drawdown - Calculation clarification

Hi
I have an account with 1,000...I make a portfolio and the profit is 5,000 so balance is 6,000. It says Max drawdown is 13%..these are EA STUDIO BACKTEST numbers. MT4 has similar numbers

I am assuming over the period of 2 years backtest...at any given time I can see floating P&L go down by 6,000*13%= -780

So during the trading if I see it go below -780 (more negative) then I should review the performance.

The reason why I ask is that over the period of 2 years backtest...my max drawdown was about $400 for a portfolio. I started trading on Jan 4 and it is now on -600. I can understand that I entered the market and was prepared to have a -400 drawdown at any given time but -600 is cause for concern.

Please advise and do suggest what you would do in a situation similar to this.

Thanks

Re: Max Drawdown - Calculation clarification

600 loss out of 1000 account shows extremely large entry amount and very high risk. You should not trade more than 5-6 strategies on such account and you should use the minimal possible entry size.

Re: Max Drawdown - Calculation clarification

Is my logic correct by looking at the drawdown of 13%.
A good feature to add would be MAE/MFE during backtest.

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