Recovery factor value tells about a trader's ability to recover from maximum losses he has made so far. For example trader A has recovery factor value of 3 and trader B has recovery factor value of 4. If we assume that all other values r same (profit, drawdown, capital etc), then trader B is better than trader A because trader B has better recovery factor than trader A.

Originally posted by Sasha

Recovery factor value tells about a trader's ability to recover from maximum losses he has made so far. For example trader A has recovery factor value of 3 and trader B has recovery factor value of 4. If we assume that all other values r same (profit, drawdown, capital etc), then trader B is better than trader A because trader B has better recovery factor than trader A.

 

Thank you.

Would you be so kind to explain also the difference between abs. drawdown and max. drawdown?

I am assuming that u understand drawdown.

Maximum drawdown is simple drawdown at any level.

Absolute drawdown is drawdown from initial deposit. 

Example:-

You made a deposit of $1000 and lost $50 on first day. It means ur absolute drawdown is 50/1000 = 5%. 

You made a deposit of $1000 and made profit of $200 on first day and then made loss of $100 on second day. Your abs drawdown will be zero because ur investment is still safe and u only lost a part of profit. Simple drawdown will be 100/1200 =  8.33%.

Originally posted by Sasha

I am assuming that u understand drawdown.

Maximum drawdown is simple drawdown at any level.

Absolute drawdown is drawdown from initial deposit. 

Example:-

You made a deposit of $1000 and lost $50 on first day. It means ur absolute drawdown is 50/1000 = 5%. 

You made a deposit of $1000 and made profit of $200 on first day and then made loss of $100 on second day. Your abs drawdown will be zero because ur investment is still safe and u only lost a part of profit. Simple drawdown will be 100/1200 =  8.33%.

 

Interesting,I always thought about abs.drawdown as a concept but never find it into an analytical tool like Fxstat.I guess Fxstat is the only one to have it.

Yes. It is because both r a part of drawdown so most websites do not give it seperately. They include it under "max drawdown" category, which is wrong.

 It is because both r a aspect of drawdown so most sites do not provide it with seperately. They consist of it under "max drawdown" classification, which is incorrect.