We use Initial Deposit as the base for comparing returns (not net deposit)

How to Calculate

• Create timeline of events from OrdersHistoryTotal()
• The equation used is netDeposit = Σ Deposit − Σ Withdraw (pulled from OP_BALANCE entries and other special entries that IsBalanceEntry() function classifies as balance entries)
• Set initialDeposit = netDeposit first, then if finding “first positive deposit” in timeline, use that amount instead
• If no deposit/withdraw in history → Estimate by netDeposit = AccountBalance() − Σ(Closed Trade PnL) then set initialDeposit = netDeposit

Advantages

• Gets “initial base” without later withdrawals/deposits, better for comparing profit %
• Has fallback when no deposit records in history

Disadvantages

• If history incomplete/broker changed, may interpret initialDeposit incorrectly
• If multiple deposits/partial withdrawals, “initial” base may not reflect current actual capital

• Balance is the remaining amount excluding profit/loss from open orders
• Calculation method is balance = AccountBalance();
• Advantage: Clean, not fluctuating with open P/L
• Disadvantage: Doesn’t reflect reality when large orders are pending

• Equity is total assets = Balance + Unrealized P/L of open orders
• Calculation method is equity = AccountEquity();
• Advantage: Reflects “current real” status, suitable for real-time monitoring
• Disadvantage: High volatility, and when paired with indicators based only on “closed orders” may cause inconsistency (see Drawdown section)

Profit in percent is % return compared to net deposit (netDeposit)

Calculation Method

• profitPercent = ((AccountEquity() – netDeposit) / MathAbs(netDeposit)) * 100;
• Guard: If |netDeposit| < 0.01 will evaluate netDeposit from Balance – Closed P/L
• Example: Net deposit 1,000 / Current Equity 1,500 → profit = 50%

Advantages

• Not distorted by deposits/withdrawals during trading like using Balance as base
• Uses Equity to reflect current picture

Disadvantages

• If netDeposit very small or previously withdrawn to low net, % can “spike” easily

Drawdown is the maximum % decrease of Trading Equity line counting only profit/loss from “closed” deals and excluding deposits/withdrawals to measure “system performance” purely

How to Calculate (Key Concept)

• Follow event timeline
• Update tradingEquity only when closing orders: tradingEquity += (OrderProfit + Commission + Swap)
• Don’t add/subtract tradingEquity with deposits/withdrawals
• Store peakTradingEquity, troughTradingEquity and calculate DD_now = (peak – trough) / peak * 100 → maxDrawdown = highest value

Advantages

• Is “deposit/withdraw neutral” shows system quality, not distorted by cash flows
• More fair comparison between different systems/accounts

Disadvantages

• Is closed-trade drawdown: doesn’t consider intratrade DD (during open deals) → risk of “rose-colored view” if deep during trading
• Uses different base than profit which relies on current Equity → may look “inconsistent”

Why can DD be > 100%?

In your code, DD is calculated from Trading Equity that counts only profit/loss from “closed” deals and excludes deposits/withdrawals

DD = [(Peak Trading Equity−Trough Trading Equity) / Peak Trading Equity] x 100

Therefore DD can be > 100% when Trough < 0 and drawdown size is “greater than” previous peak, for example

• Example: Peak = 1,000 but accumulated loss from closed deals brings Trading Equity to −800
  ⇒ DD = (1,000 − (−800)) / 1,000 = 180%

This happens because your “Trading Equity line”

• Doesn’t increase when you make new deposits (deposits aren’t counted in Trading Equity)

• Decreases every time a losing trade is closed allowing “total P/L from trading” to go negative beyond initial capital (accounting-wise), even though real accounts won’t go negative due to margin calls or your added funds

Common Situations

Add funds during trading but still losing. New Deposits aren’t counted in Trading Equity → if you had peak 1,000 then accumulated closed deal losses exceed 1,000 (e.g. −1,200) Trading Equity will be negative → DD > 100%

Setting initial base (initialDeposit) small/incorrectly

If deposit timeline recorded incorrectly or History page incomplete, making initialDeposit or first peak very small even small losses can make DD% high/exceed 100% easily

Indicator perspectives “don’t match”

• Your Profit% uses AccountEquity (including unrealized profit/loss) compared to Net Deposit

• But DD uses Closed-trade Trading Equity (excluding deposits/withdrawals)
  So it’s possible Profit looks good but DD very high (even >100%) because base and datasets are different

Incorrect Balance Entry categorization

If IsBalanceEntry() deposit/withdrawal types miscategorized (e.g. broker enters fees/special credits unusually) → peak/initial base distorted → DD% jumps

How should we view DD > 100%?

• Mathematically: Formula is correct — it means “sum of closed deal losses” exceeded previous peak capital (without interim deposits, system would be “strategically bankrupt”)

• Practically: This indicator is measuring “system skill” without letting new deposits cover losses so it’s strict and useful when wanting to know if original strategy would survive without capital injection

P/D Ratio is “profit vs DD depth” indicator = profitPercent / maxDrawdown → if maxDrawdown == 0 and profit > 0 → set 999

Advantages

• Easy to understand, compares return vs risk in one metric
• Excellent for quick screening of many systems

Disadvantages

• Very sensitive to small DD (even 1-2% DD can spike)
• Not annualized and ignores “return path” or volatility