# What is relative drawdown mt4

Relative drawdown in mt4 s report is calculated as a percentage of the difference of the historical equity high and equity low against the equity high.

The drawdown can be expressed as a percentage of the maximum capital amount to which it refers in which case we speak of relative drawdown. From this explanation i understand that the relative drawdown can never be the same value as maximum drawdown because they express totaly different things yet in most backtests these 2 percentages seem to be equal.

relative drawdown in mt4s report is calculated as a percentage of the difference of the historical equity high and equity low, against the equity high.

relative drawdown is the highest max-drawdown in percentage during the test period.

for mt4s relative drawdown, it is (110-100)110 100 9. For relative drawdown based on pre-trade balance, it is (100-100)100 100 0. With mt4s calculation, even though your equity never dropped below your starting balance, your relative drawdown is 9. But with relative drawdown calculated against balance, it is 0.

relative drawdown is a ratio between the maximal drawdown and the value of the corresponding local maximum of the equity.

now i understand that maximum drawdown is the maximum drop of equity in absolute amount, whereas relative drawdown is the maximum drop of equity in percentage. This is an example of mt4 report showing different maximum drawdown and relative drawdown values.

maximal drawdown is the number in dollars, relative drawdown is that number in percentage of your account. Go back, read the second and third posts, and look at the picture.

Relative drawdown the maximal loss in percents of the maximum equity value and its corresponding money value total trades total amount of trade positions short positions (won ) amount of short positions and the profit percentage thereof.

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