Discussion of article "The Easy Way to Evaluate a Signal: Trading Activity, Drawdown/Load and MFE/MAE Distribution Charts"
Thank you! I understand!
EXCELLENT ARTICLE!
Everyone involved in forex, especially in expert advisors, should read this.
Thank you, its very helpful.
very detailed article. Thank you very much.
Thank you for a very useful article.
However, I couldn't understand the drawdown chart section. Can anyone helps me please?
1) "Review the chart of drawdown over the entire signal monitoring period in order to understand what was the risk on the account before a position was closed with a profit." How can I determine the potential risk from the chart?
2) "For example, in this case we see that the profit over the trading account lifetime was 18% to 76% per month, while the floating drawdown reached more than 16% in May. Compare the account drawdown and profit to decide if you are ready to lose 18% (or multiply it by 3, that is 18 * 3 = 54%) of the deposit if the same drawdown happens on the provider's account again”. Why did the write consider that 18% is a loss, isn't that a profit from May? Also, why should I multiply it by 3? Where did this 3 came from? Lastly, is the drawdown 54% or 18%?
I'm sorry if these questions seemed obvious, I'm beginner and I'd really appreciate if someone explains to me. Thank you :)
Why do you not factor the Leverage again in the Deposit Load calculation so that the statistic can be directly comparable across all Signals?
Nice article, it cleared my doubt of MAE vs MFE, thanks!
Great article, this should be mandatory reading for everyone who wants to start with signals.
Thanks, but is the Drawdown really only unrealized losses? Drawdown should also be realized losses the reduces the balance relative to the highest recorded balance on the account
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New article The Easy Way to Evaluate a Signal: Trading Activity, Drawdown/Load and MFE/MAE Distribution Charts has been published:
Subscribers often search for an appropriate signal by analyzing the total growth on the signal provider's account, which is not a bad idea. However, it is also important to analyze potential risks of a particular trading strategy. In this article we will show a simple and efficient way to evaluate a Trading Signal based on its performance values.
The account balance and equity values of each signal are monitored since the account registration in the Signals service. The difference between these values is positive, if currently open positions show a floating profit. But if the equity is less than the balance value, it means that the trading account is having a drawdown or unrecorded loss.
Author: MetaQuotes Software Corp.