Drawdown

Every person who trades with the help of Forex robots or manually experienced such thing as a drawdown for sure. And if you don’t know what is it, let’s figure out its definition and types.

Drawdown – is a floating or fixed loss, as a result of the opening of a non-profitable deal.

There are two types of drawdown:

1. Floating (equity). During such a drawdown the deal remains open, so the loss isn’t fixed. The loss in such a situation may increase, decrease or even turn a profit.

2. Fixed. When you are closing a deal in a loss it’s negatively affect your account balance. So basically this is a transition from a floating drawdown to a fixed drawdown.

But despite the negative undertone of this term, drawdown is a very important component of the trading strategy - there is no trade without drawdowns as such. The drawdown percentage can help us to assess the risk and plan our further actions - increase the risk (and therefore the profit) or not.

There are different robots and signals that use all sorts of Forex strategies. Accurate Forex signals can trade less often, but the drawdown will be lower. Some of robots and signals are using floating type of drawdown and make total profit, other work on the principle of fixed drawdown, which can temporarily reduce the deposit, but as a result make profit as well.

There are a lot of options, and here you will be able to find Expert Advisor that you need using our convenient search and sorting.