Why is absolute and maximum drawdown not correct?

#1

Hi,

I have done the backtest using EA : Moving Average.ex4 for EURUSD from 11.21.2018 to 11.24.2018. I have spent a lot of time to calculate the Absolute Drawdown and Max Drawdown by hand and it does not tally with MT4 output. Is there a possibility the MT4 output is not correct? Kindly help.

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# Time Type Order Size Price No of Pips S/L T/P Profit Balance
1 2018.11.21 11:00 sell 1 0.2 1.69992
2 2018.11.21 14:00 close 1 0.2 1.70234 -24.2 -37.77 9962.23
3 2018.11.21 15:00 sell 2 0.2 1.7008
4 2018.11.23 12:00 close 2 0.2 1.69915 16.5 23.34 9985.57
5 2018.11.23 14:00 sell 3 0.2 1.69683
6 2018.11.23 16:00 close 3 0.2 1.70002 -31.9 -49.35 9936.22
7 2018.11.23 18:00 sell 4 0.2 1.69417
8 2018.11.23 23:58 close at stop 4 0.2 1.69561 -14.4 -23.05 9913.17
#2

It is correct! There is nothing wrong with the calculation!

The Absolute Drawdown is calculated based on your Equity vs. the Initial Balance, while the Maximal Drawdown and Relative Drawdown are calculated based on Equity vs. Equity (not Balance vs Balance). So at some point your Equity must have been higher than the initial balance, so as to account for the 307.39 Maximal Drawdown compared to the 173.15 of Absolute Drawdown and it must have also been lower than your final balance to account for a 173.15 of Absolute Drawdown compared to your 86.83 of final loss.