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"

 

thanks bee for your post. When I saw your post for some weeks ago was the first time I knew it. Or I mean I know it already but I never knew the right term.

Originally posted by Jogi

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

 

Its weird if Abs DD cannot greater than max DD........my AbsDD is 17,5%....but maxDD is 0%.......

AbsDD 17,5% make me loss $0.18.........There must be another formula to calculate DD.

Originally posted by bluevirgin23

test 4first post...

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well come dear to this new world :D

Originally posted by widhie75

Its weird if Abs DD cannot greater than max DD........my AbsDD is 17,5%....but maxDD is 0%.......

AbsDD 17,5% make me loss $0.18.........There must be another formula to calculate DD.

i am still confused to know about the Maximum DD.