Absolute drawdown is the difference between the initial deposit and the smalles value of balance within testing:
AbsoluteDrawDown = Initial Deposit - Minimal Balance
Maximal drawdown is the highest difference between one of local upper extremums of the balance graph and the following lower extremums:
MaximalDrawDown = Max of (Maximal Peak - next Minimal Peak)
For example
You deposited $100 and made a loss of $10. Then you made a profit of $30 and again a loss of 20
In this example the maximum Draw-down is $20. But the Absolute Draw-down is $10.
Relative Drawdown mean the average of all the drawdown.
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any one could explane difference between maximal drawdown and absolute drawdown?
In some backtest they are very different and i would like answer to appreciate an EA.
Thanks in advance.