Interesting Equity drawdown calculation in backtesting
Interesting Equity drawdown calculation in backtesting
06 Oct 2024, 10:13
Hi,
I run a backtest in MacOS 5.0.20 version. My bot opens a single position at a time.
This is a screenshot from the result:
I started the test with 10K balance. At the end of first trade it shows min equity as 8.895€ but says 1.986€ equity drawdown. It should be 1.105€ while i started with 10K balance, right? What am i missing here?
Here is the trade list to show that there is only one trade at a time:
Replies
foram456teen
08 Oct 2024, 06:15
( Updated at: 09 Oct 2024, 03:42 )
Interesting Equity drawdown calculation in backtesting
Hello,
Max drawdown is calculated from the highest equity point, not from the initial balance.
Best Regard,
@foram456teen
protraderde
08 Oct 2024, 11:37
RE: Interesting Equity drawdown calculation in backtesting
Hi Panagiotis,
So, if before a single opening position, i had a balance of 10K.
After closing this single position my balance becomes 15K.
And if i saw 5K as minimum equity while i have this position.
What is my equity drawdown for this trade process?
I would expect to see 5K because i needed to have at least 5K available margin to keep this trade open.
Best
@protraderde
PanagiotisCharalampous
08 Oct 2024, 12:50
( Updated at: 08 Oct 2024, 12:51 )
RE: RE: Interesting Equity drawdown calculation in backtesting
protraderde said:
Hi Panagiotis,
So, if before a single opening position, i had a balance of 10K.
After closing this single position my balance becomes 15K.
And if i saw 5K as minimum equity while i have this position.
What is my equity drawdown for this trade process?
I would expect to see 5K because i needed to have at least 5K available margin to keep this trade open.
Best
It depends on what was the highest equity reached
@PanagiotisCharalampous
PanagiotisCharalampous
07 Oct 2024, 05:59
Hi there,
Max drawdown is measured from max equity, not from starting balance.
Best regards,
Panagiotis
@PanagiotisCharalampous