Equity Drawdown Relative vs. broker account stop out
On my brokers trading account I have a 50% stop out call, meaning, that when my DD will reach 50% of my balance the trade will be closed with 50% account loss.
When I am back testing Expert Advisors in my meta trader I can see a position called Equity Drawdown Relative.
QUESTION: if my Equity Drawdown Relative reaches 51% will my trade be stopped out and closed with loss??
50% stop out level doesn't mean that your trades will be closed if you reach 50% drawdown on your account, it means that if your equity drops to 50% of your used margin, these trades will be closed (one at a time, as the equity/used margin ratio improves).
50% stop out level doesn't mean that your trades will be closed if you reach 50% drawdown on your account, it means that if your equity drops to 50% of your used margin, these trades will be closed (one at a time, as the equity/used margin ratio improves).
Thank you for sharing some light at that :D
So let's say I have only one trade open at the time and coming back to my example. Does that mean if the tested EA Equity Drawdown Relative would reach 51% in real life trading the trade would be closed with a loss or not??
Thank you for sharing some light at that :D
So let's say I have only one trade open at the time and coming back to my example. Does that mean if the tested EA Equity Drawdown Relative would reach 51% in real life trading the trade would be closed with a loss or not??
Of course not, read again my answer carefully.
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On my brokers trading account I have a 50% stop out call, meaning, that when my DD will reach 50% of my balance the trade will be closed with 50% account loss.
When I am back testing Expert Advisors in my meta trader I can see a position called Equity Drawdown Relative.
QUESTION: if my Equity Drawdown Relative reaches 51% will my trade be stopped out and closed with loss??