Tester: What the Numbers in the Expert Testing Report Mean - page 2

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Hi:

 The following sentence is not true "Maximal drawdown is the highest difference between one of local upper extremums of the balance graph and the following lower extremums:" 

In my case, the  maximal drawdown is calculated based on equity graph, and not based on balance graph.

 

You can find the correct definition in MetaTrader 4 Help: https://www.metatrader4.com/en/trading-platform/help/autotrading/tester/tester_results

  • Relative drawdown – the maximal loss in percents of the maximum equity value and its corresponding money value;

 

 Why people write articles with misinformation?

AOR 

Results - Strategy Testing - Auto Trading - MetaTrader 4 Help
Results - Strategy Testing - Auto Trading - MetaTrader 4 Help
  • www.metatrader4.com
After the testing has been completed, one can see the results thereof in the tabs of "Results", "Graph", "Report"...
 

Hi,

Drawdown (%) = 100% * (former Balance - later Balance) / (former Balance)

                               where former Balance > later Balance 

Therefore, Maximal Drawdown can be determined when (later Balance / former Balance)~0

 

nice article. Thank you!


Which is more important...Relative Drawdown or Maximal Drawdown?

 

An interesting article, but it's worth noting that:

"Ticks modelled" field:

  • In reality, "Ticks modelled" refers to the number of ticks used in the modeling process, rather than directly representing the state of the bar. In the "Every tick" model in MT4, the platform attempts to reflect price movements within a bar as accurately as possible. However, in other models (e.g., "Open prices only"), ticks are simulated rather than replicated.

"Modelling quality" calculation:

  • While the formula is correct, it's important to note that in practice, the accuracy of modeling largely depends on the quality of available historical data and the chosen testing model (Every tick, Control points, etc.). A high modeling quality index does not always guarantee accuracy if the historical data is incomplete or poorly processed.

"Absolute drawdown" vs. "Maximal drawdown":

  • "Absolute drawdown" is important in the context of the risk related to the initial capital, whereas "Maximal drawdown" better illustrates the volatility and risk of capital throughout the entire testing period. Investors and analysts often pay more attention to "Maximal drawdown" as a key risk indicator.

"Expected Payoff":

  • It is worth noting that "Expected Payoff" is a theoretical indicator and may not accurately reflect the real-world performance of a strategy, especially in changing market conditions.

"Colors used for modeling quality diagram":

  • The information is accurate, but it does not mention that these colors may vary depending on the version of MetaTrader 4 or specific settings in the strategy tester.


Thank you !

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