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What is Drawdown in Forex?

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Drawdowns in Forex are the difference between the initial balance and the current account equity. When the Equity balance is lower than your initial balance, that means you are experiencing Drawdown. For example, you start trading with a net balance of 100,000 US Dollars, then you see the current Equity balance being 95,000 Dollars. This means, the amount of Drawdown in your Forex is 5,000 US Dollars.
Many traders do not realize that they are experiencing a fairly high drawdown, because they feel they have not experienced successive losses. Though the higher the Forex Drawdown, the greater the percentage of profit that must be collected to cover the loss. Quite often irrational ways are carried out by traders who experience large drawdowns. One of them is taking risks by increasing the lot size. They forget the principle of Money Management and tend to trade for revenge. This is where you need to understand the importance of keeping drawdowns low when trading.

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#1 - August 02, 2019, 01:35:57 AM

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Drawdon is used to measure trading performance just like our trading performance.
#2 - August 02, 2019, 04:05:40 PM

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drawdown illustrates our trading performance, whether developing or even experiencing a setback.
#3 - August 02, 2019, 09:33:48 PM

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I also often observe drawdowns especially when evaluating.
#4 - October 11, 2019, 08:33:30 AM

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drawdown can we see the performance or development of our trading.
#5 - October 12, 2019, 06:54:53 PM

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drawdown is a tool / analysis that we can use to see our trading performance for some time / period, usually a drawdown is used by traders to prove a system or EA that has good or poor performance.
#6 - January 14, 2020, 10:04:15 AM

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we can see the drawdown in the mt4 feature, we can use the drawdown to measure how good our trading performance is and whether it has increased over time or has decreased its performance.
#7 - January 15, 2020, 02:03:02 AM

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Drawdown not only shows our trading performance but also evaluates the health of our account, whether our account is growing slowly, normally or too fast. If our account growth is consistent, it means that our trading strategies and systems are good, but if it is lacking or even unrealistic, we need to improve it.
#8 - January 16, 2020, 01:37:11 AM

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and then how to see our drawdawn when we are trading sir,,i dont see anything at mt4 just history and others tools
#9 - January 16, 2020, 07:42:01 AM

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I see a drawdown when evaluating at the end of the period to compare my trading results last month with the relevant month, in my opinion drawdowns are quite effective to be used for evaluation and we can also find out how far our skills are developing.
#10 - January 20, 2020, 02:16:07 AM

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If we look at the drawdown, we can find out some information including what percentage of our loss and profit and the average development of our trading performance so this drawdown is quite important.
#11 - January 20, 2020, 07:05:49 AM

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Drawdown is an analysis tool that is available on the mt4 platform, we just download it there and drawdown can be used for evaluation and correction for every trade we make. In my opinion drawdown is quite important but not many traders use it.
#12 - January 22, 2020, 12:20:25 AM

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Drawdowns can be used for evaluation material and also to see the development of our trading performance from period to period so that we can make decisions on which parts we should improve and which parts we must maintain.
#13 - February 02, 2020, 04:41:25 PM

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Drawdowns can be used to see the development of our capabilities and also trading performance, whether we are in good growth, rapid growth, backward or even stagnant, but usually drawdowns only show short-term trading performance.
#14 - February 03, 2020, 07:21:14 AM

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Drawdown is often the choice of tools for evaluating, by using drawdown in evaluation we will know a lot of information about the development of our trading performance so that we know what we have to change and what we have to maintain, especially related to strategy.
#15 - February 04, 2020, 03:55:25 PM

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