SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?


To: Christopher who wrote (2737)3/20/1998 11:16:00 PM
From: DADDY WARBUCKS  Read Replies (2) | Respond to of 4969
 
Chris,
Max Drawdown can come from one trade or a number of trades. It it the maximum loss one would sustain if they started trading a system at its peak equity. Say a persons acct. went from 10k to 20k with 1 loss of 2k in the process. Then 2k would be max drawdown.

Now it trades from 20k to 15k. Now 5k is the max drawdown. The person has still made 5k overall.

Another person starts trading the system at the time person 1 has 20k. His acct. goes from a beginning balance of 10k to a balance of 5k. He has a 5k loss trading the same system.

Daddy