Balance Max Drawdown represents the maximum loss recorded from a peak to a trough in your account value, before reaching a new peak.
🔍 In other words:
It is the largest drop in the portfolio of a signal provider or aspiring signal provider, whether due to realized (closed) or unrealized (still open) losses.
How is it calculated?
It is measured as the difference between:
🔺 The highest point (highest balance reached)
🔻 And the subsequent lowest point (before reaching a new peak)
Includes:
✅ Realized losses (from closed trades)
✅ Unrealized losses (from trades still open)
Can it be reset?
No, the Max Drawdown cannot be reset.
Once your account reaches a certain maximum drawdown level, that value is permanently recorded as your highest historical drawdown.
Example
Event | Account Value |
Initial Peak | £10,000 |
Subsequent fall | £7,000 |
New peak (after full recovery) | £11,000 |
➡️ In this case, the Balance Max Drawdown would be £3,000 (30%), as it is the largest drop before reaching a new high.
Why is it important?
Max Drawdown is a key metric for assessing the risk of your trading strategy:
🔹 It lets you know your worst financial moment
🔹 It helps signal providers and copiers analyze the stability of an account
🔹 It serves as a guide for setting loss limits and improving risk management