Categories

Question:How to calculate "Maximal relative drawdown" on Social Trading?

Answer:

Maximal relative drawdown shows a percentage of losses in an account.

It’s calculated using the formula :

Max ((MaximalPeak – NextMinimalPeak) / (MaximalPeak + 100) * 100) (%)

where:

  • Max — the highest relative drawdown value;
  • MaximalPeak — the upper extremum value corresponding to Max in the profitability chart;
  • NextMinimalPeak — the lower extremum value following MaximalPeak in the profitability chart.

How to calculate Maximal relative drawdown

Example of relative drawdown calculation for the chart above:

Let’s estimate the extremums of the profitability chart (“H” for the highest and “L” for the lowest)

  • H1 = 80%, L1= 50%;
  • H2 = 90%, L2 = 35%;
  • H3 = 135%, L3 = 40%;
  • H4= 195%, L4 = 65%.

Relative drawdown values are calculated as follows:

  • PercentDrawDown1 = (H1 – L1) / (H1 + 100) * 100 = (80 – 50) / (80 + 100) х 100 = 16,67%
  • PercentDrawDown2 = (H2 – L2) / (H2 + 100) * 100 = (90 – 35) / (90 + 100) х 100 = 28,95%
  • PercentDrawDown3 = (H3 – L3) / (H3 + 100) * 100 = (135 – 40) / (135 + 100) х 100 = 40,43%
  • PercentDrawDown4 = (H4 – L4) / (H4 + 100) * 100 = (195 – 65) / (195 + 100) х 100 = 44,07%

MaxRelativeDrawdown = 44,07%

All Forex Brokers

  • IFC Markets
  • FxPro
  • IronFX
  • iFOREX
  • Axiory
  • FBS
  • Land-FX
  • MyFX Markets
  • Titan FX
  • Traders Trust
  • XM
  • LMFX
  • FXDD
  • ForexClub
  • KVB Kunlun
  • Tradeview
  • EightCap
  • FXOpen
  • HotForex
  • FXGiants
  • LQDFX
  • Fortrade
  • CM Trading
  • InstaForex
  • FXPRIMUS
  • ForexMart
  • TeleTrade
  • Valutrades
  • AvaTrade
  • Yadix
  • RFXT
  • easyMarkets
  • JustForex
  • Swiss Markets
  • FXTM
  • HYCM
  • TrioMarkets
  • Orbex
  • FP Markets
  • SimpleFX
  • IC Markets
  • Evolve Markets
  • Tickmill
  • Markets.com
  • Z.com Trade
  • UFX
  • Anzo Capital
  • LiteForex
  • XLN Trade
  • 4xCube
  • OctaFX

All Crypto-Currency Exchanges

  • CEX.IO
  • HitBTC
  • Paxful
  • BitMEX
  • C-CEX
  • Binance
  • Cryptopia
  • YObit
  • Wisebitcoin
  • Bibox
  • BKEX
  • CoinPark
  • CoinEx
  • IRONX
  • CoinField
  • bybit

This website uses cookies

By using our site, you acknowledge that you have read and understand our Privacy Policy (Cookie Policy), and our Terms of Service.