Thanks for your comments Tim
However we are not sure how did you derive the 28% drawdown.
We actually implement money management for this EA.
Prior to the losses, account balance was at 11,673.35 and the total losses for both trades total about 906.91
We only lost about 8% actually.
We be interested to know how did you actually came up with the 28% figure.
Thanks for reading. Your inputs are valuable to us.
Hi 10pipspro,
The calculation is based on the info' supplied, i.e. the P/L in terms of pips.
Tuesday's total: 755
Wednesday's total: 545 (pips P/L -210)
Drawdown: 28%.
If your risk and money management strategies are such that the actual drawdown in monetary terms is only 8%, then I'm very pleased for you, but there is a disconnect between pips won and lost and actual money won and lost. They are separate things, not to be confused. You and I both know that this boils down to position size and risk & money management. Following on from this, I recommend that you make clear what it is that are you trying to show. Are you wanting to show . . .
A) How much profit in monetary terms your system makes? (i.e. money
not pips)
or . . .
B) How many pips your system makes? (i.e pips
not money)
If your product is totally automated so that your clients merely load the software and log on every once in a while to see how much money they've made, then position sizing isn't so much of an issue as the software does it for them. If this is the case, then I suggest you post your P/L in monetary terms only, as opposed to pips, as it's possible to have a loss in terms of pips but still make a profit in terms of £££'s. Obviously the converse is also true, whereby your pips P/L is positive but your £££ P/L is negative.
If, on the other hand, your software generates signals and then each client has to work out their own position size - then I suggest you continue to post your results in terms of pips won and lost. The discretionary input on the part of each trader is key here - especially regarding position size and risk & money management. However, if you do that, it
must be based on a fixed trade size, otherwise the pips P/L becomes almost meaningless for the reasons given above and, indeed, as you yourself have shown.
Sorry if I've not explained this very well; let me know if it's unclear.
Tim.
