Forex drawdown definition finance
Those who are forex drawdown definition finance to definition maximum drawdown forex may not be familiar with certain terminology. Drawdown is most commonly used to refer to the high-to-low decline experienced by a trader or fund over a specified time period.
Drawdown is measured from the time a retrenchment begins until a new high is reached, which is why you will often hear people referring to the max historic drawdown. Maximum drawdown is the amount of equity lost by a trader or fund during its entire history. Many people use historic drawdown to help determine an investments risk. Funds or traders which have gone through periods of significant drawdown are seen to be significantly more risky. First off historic drawdown provides no indication of future risk and is simply a measure of past performance. While a trader may have a very low historic drawdown, there is no guarantee that they won’t blow their entire account the next day.
Drawdown is useful in helping an individual determine the risk involved with a particular investment proposition or as a performance indicator. Complete real-time news for UK equities professionals and active non-professional traders. Can you afford not to be in the know? Set up an online Virtual Portfolio. See more trades and director dealings. Play the Fantasy Share Trading Game. 8 – sparky 291 – S.
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