I will explain these drawdowns with an example

You deposited $100 and made a loss of $10. Then you made a profit of $30 and again a loss of 20

In this example the maximum drawdown is $20. But the absolute drawdown is $10.

Absolute drawdown is difference between the initial deposit and minimal level below the deposit.

Maximum drawdown is the maximum possible loss or loosing streak before you gain some profit. In other words it can be defined as "difference between one of local upper extremums of the balance graph and the following lower extremums"

Originally posted by Bee

 

I will explain these drawdowns with an example

 

You deposited $100 and made a loss of $10. Then you made a profit of $30 and again a loss of 20

 

In this example the maximum drawdown is $20. But the absolute drawdown is $10.

 

Absolute drawdown is difference between the initial deposit and minimal level below the deposit.

 

Maximum drawdown is the maximum possible loss or loosing streak before you gain some profit. In other words it can be defined as "difference between one of local upper extremums of the balance graph and the following lower extremums"

 

Oh, thank you very much. That was very well explained =)

I was also confused abt it. I thought it would be some very difficult mathematical calculation so left it. But it was so easy.

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Originally posted by bluevirgin23

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bluevirgin23, Welcome to fxstat.

Originally posted by bluevirgin23

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Welcome buddy. But it looks so odd to welcome you in a thread of drawdown :). Maybe you can introduce yourself by openning a different thread.

Originally posted by Bee

I will explain these drawdowns with an example

You deposited $100 and made a loss of $10. Then you made a profit of $30 and again a loss of 20

In this example the maximum drawdown is $20. But the absolute drawdown is $10.

Absolute drawdown is difference between the initial deposit and minimal level below the deposit.

Maximum drawdown is the maximum possible loss or loosing streak before you gain some profit. In other words it can be defined as "difference between one of local upper extremums of the balance graph and the following lower extremums"

This issue was also confusing me. Thanks for explaining bee.

Absolute drawdown cannot be greater than maximum drawdown. It means maximum drawdown should be checked in analyzing someone's performance.

I think my statement is also very confusing to myself, i got a 506% DD on my swingwang statement but on another website, it has just 75% for the whole of the 3 months i have traded the account, why would fxstats have 506% for 3 months now without any changes to it and another site has 75% for the same 3 months?

I cannot see your drawdown and any other statistics that are below monthly results. No graph, no statistics, no probability, no pie chart. Have you locked it?