Strategy Analyzer Question

[franco12364]

Hello,

The strategy analyzer in NT7 shows cumulative profit and draw down in percentage. Attached is a picture of max draw down. I am confused, percentage of what? My account size?

NT8 shows the max draw down in dollars, so I can easily say "If the max draw down is -$10k, and I am willing to risk 10% of my account, then I can trade this strategy with $100K", but with NT7, I don't exactly know what the max draw down is because the percentage is confusing. I am having a hard time visualizing how much I can risk with this strategy because I don't know what the percentage is really telling me. When it says -23%, what exactly is it referring to?

[NinjaTrader_Kate]

Hello franco12364,

Thank you for your post.

Here's how NinjaTrader calculates the Max Drawdown:

Drawdown = local maximum account size – local minimum account size
Max Drawdown = single largest Drawdown

As an example, your account rises from $25,000 to $50,000. It then subsequently drops to $40,000 but rises again to $60,000. The drawdown in this case would be $10,000 or -20%. Take note that drawdown does not necessarily have to correspond with a loss in your original account principal.

You can set the Strategy Analyzer to display this in Currency instead of percent, there's a dropdown that's not very obvious right above the Summary/Chart/Graphs/etc. tabs, you've got it set to Percent currently. Click that field and change it to Currency, and that should be easier for you.

Please let us know if we may be of further assistance to you.