[{"data":1,"prerenderedAt":1227},["ShallowReactive",2],{"\u002Fglossary\u002Fwhat-is-absolute-gain":3,"\u002Fglossary\u002Fwhat-is-absolute-gain-related":257},{"id":4,"title":5,"body":6,"category":241,"date":242,"description":243,"draft":244,"extension":245,"meta":246,"navigation":244,"path":247,"related":248,"seo":253,"stem":254,"term":255,"updated":242,"__hash__":256},"glossary\u002F5.glossary\u002Fwhat-is-absolute-gain.md","What Is Absolute Gain? Abs. Gain vs Gain",{"type":7,"value":8,"toc":232},"minimark",[9,18,23,26,37,40,68,72,83,86,97,100,104,112,115,119,133,151,155,174,189,192,196,225],[10,11,12,13,17],"p",{},"Absolute gain is the profit an account has realised measured against the money paid into it: net closed profit and loss divided by total deposits, as a percentage. Unlike a time-weighted figure, it makes no attempt to remove the effect of when that capital arrived. On ShowMyTrades it is the row labelled ",[14,15,16],"strong",{},"Abs. Gain",".",[19,20,22],"h2",{"id":21},"how-it-works","How it works",[10,24,25],{},"Two quantities, both from the account's own history:",[27,28,33],"pre",{"className":29,"code":31,"language":32},[30],"language-text","Abs. Gain % = Net closed P&L \u002F Total deposits × 100\n\nNet closed P&L = Σ (profit + swap + commission) over all closed trades\nTotal deposits = Σ every deposit ever credited to the account\n","text",[34,35,31],"code",{"__ignoreMap":36},"",[10,38,39],{},"Three properties follow, and each matters when reading someone else's page.",[41,42,43,56,62],"ul",{},[44,45,46,49,50,55],"li",{},[14,47,48],{},"The numerator is net of costs."," Every closed trade enters with its commission and its ",[51,52,54],"a",{"href":53},"\u002Fglossary\u002Fwhat-is-a-swap-in-forex","swap"," already applied, so the figure is what the account kept, not what the trades looked like before the broker was paid.",[44,57,58,61],{},[14,59,60],{},"It counts closed trades only."," Unrealised profit or loss on open positions is not in it. The number moves when a position closes, not when it moves against you.",[44,63,64,67],{},[14,65,66],{},"The denominator is every deposit, not the starting balance."," An account funded in five instalments carries all five, including the one that arrived last week. Withdrawals appear in neither term, so taking profits out neither helps nor hurts the percentage.",[19,69,71],{"id":70},"abs-gain-read-against-gain","Abs. Gain read against Gain",[10,73,74,77,78,82],{},[14,75,76],{},"Gain",", the row directly above it, is ",[51,79,81],{"href":80},"\u002Fglossary\u002Fwhat-is-time-weighted-return","time-weighted return",". Each closed trade contributes one factor — its net result over the balance standing before it — and those factors are multiplied together. Deposits and withdrawals move the balance but never create a factor of their own.",[10,84,85],{},"That has an exact consequence. On an account funded once and never topped up or withdrawn from, the chain of factors collapses to final balance divided by the deposit, which is 1 + Abs. Gain. The two rows print the same number, and separate only once cash has moved.",[10,87,88,89,92,93,96],{},"Fund an account with $10,000 and make $2,000: both rows read +20.00%. Now deposit another $10,000 and make $2,000 more. Abs. Gain is $4,000 \u002F $20,000 = ",[14,90,91],{},"+20.00%",". Gain is 1.20 × (1 + 2,000\u002F22,000) − 1 = ",[14,94,95],{},"+30.91%",", because the second $2,000 is measured against the $22,000 standing when it was earned, not against every dollar ever paid in.",[10,98,99],{},"Neither is wrong: Abs. Gain answers what the account returned on the money committed to it, Gain how well that money was traded. Only the second compares cleanly across accounts of different sizes.",[19,101,103],{"id":102},"why-it-matters","Why it matters",[10,105,106,107,111],{},"The asymmetry runs one way, and that is the useful part. A rescue deposit after a bad month cannot lift Abs. Gain: fresh money lands in the denominator and nowhere else, so the percentage drops the moment it arrives and only trading brings it back. That makes it ",[51,108,110],{"href":109},"\u002Fguides\u002Fspotting-fake-ea-results","harder to manufacture"," than a steep balance chart, which any deposit will produce.",[10,113,114],{},"The same mechanism is the limitation. An account scaled up after it started working reads low even when every trade was good, because most of the denominator arrived after most of the trading. Read the pair, never one row alone.",[19,116,118],{"id":117},"what-the-data-shows","What the data shows",[10,120,121,122,128,129,132],{},"The figures below describe accounts published on ShowMyTrades, not traders in general. Funding is rarely a single event here: ",[14,123,124],{},[51,125,127],{"href":126},"\u002Fguides\u002Ftracking-multiple-accounts-portfolio","699 users run more than one account"," and ",[14,130,131],{},"429 run accounts at more than one broker",". Money moved between them arrives as a fresh deposit at the destination and enlarges its denominator permanently.",[10,134,135,136,139,140,143,144,128,147,150],{},"Across the ",[14,137,138],{},"published accounts with trading history"," (August 2026), built from ",[14,141,142],{},"15,436,464 synchronised trades",", the median time-weighted return is ",[14,145,146],{},"+3.2%",[14,148,149],{},"63.0%"," of accounts are positive on that basis. Wherever an account's two rows disagree, the gap between them is measuring its funding history and nothing else.",[19,152,154],{"id":153},"where-you-see-it-on-showmytrades","Where you see it on ShowMyTrades",[10,156,157,159,160,163,164,166,167,128,170,173],{},[14,158,16],{}," is the second row of the ",[14,161,162],{},"Account Stats"," panel, directly under ",[14,165,76],{},", on every published account page and in the Complete Dashboard widget when that page is embedded elsewhere. The panel separates its blocks with a rule but prints no headings, so Gain, Abs. Gain, ",[14,168,169],{},"Avg Daily %",[14,171,172],{},"Avg Monthly %"," read as the first four rows.",[10,175,176,177,180,181,184,185,188],{},"Both ingredients appear further down the same panel. ",[14,178,179],{},"Profit"," is the numerator — net closed profit and loss in account currency — and ",[14,182,183],{},"Deposits"," is the denominator, with ",[14,186,187],{},"Withdrawals"," beside them so a reader can see what has been taken out without wondering whether it moved the percentage. It did not.",[10,190,191],{},"The value is not calculated in your browser. It is produced by our statistics service from the account's synchronised history and refreshed on each sync, and the same figure feeds the public page, the owner's dashboard and the widget alike.",[19,193,195],{"id":194},"common-misunderstandings","Common misunderstandings",[41,197,198,213,219],{},[44,199,200,203,204,208,209,212],{},[14,201,202],{},"\"My open positions are in it.\""," They are not. ",[51,205,207],{"href":206},"\u002Fglossary\u002Fwhat-is-an-equity-curve","Floating profit and loss"," appears in the ",[14,210,211],{},"Equity"," row of the same panel, never in Abs. Gain.",[44,214,215,218],{},[14,216,217],{},"\"A withdrawal lowered it.\""," It cannot. Withdrawals are absent from both the numerator and the denominator.",[44,220,221,224],{},[14,222,223],{},"\"A bigger Abs. Gain means better trading.\""," Not across accounts. It also records when the money arrived: two identical strategies, one funded once and one topped up monthly, will not print the same figure.",[10,226,227,228,17],{},"For how this row reads alongside every other number on the page, see ",[51,229,231],{"href":230},"\u002Fguides\u002Freading-a-trading-account-dashboard","how to read a trading account dashboard",{"title":36,"searchDepth":233,"depth":233,"links":234},2,[235,236,237,238,239,240],{"id":21,"depth":233,"text":22},{"id":70,"depth":233,"text":71},{"id":102,"depth":233,"text":103},{"id":117,"depth":233,"text":118},{"id":153,"depth":233,"text":154},{"id":194,"depth":233,"text":195},"Metrics","2026-08-19T00:00:00.000Z","Absolute gain is net closed profit and loss divided by total deposits. Here is the formula, how it differs from Gain, and what published accounts show.",true,"md",{},"\u002Fglossary\u002Fwhat-is-absolute-gain",[249,250,251,252],"what-is-time-weighted-return","what-is-drawdown-on-balance","what-is-an-equity-curve","what-is-a-profit-factor",{"title":5,"description":243},"5.glossary\u002Fwhat-is-absolute-gain","Absolute Gain","FFtKoKiYZFPxnfhaNPOTaeILG4TlCjF_k0hrOL8RPEI",[258,549,796,1014],{"id":259,"title":260,"body":261,"category":241,"date":242,"description":537,"draft":538,"extension":245,"meta":539,"navigation":244,"path":540,"related":541,"seo":546,"stem":547,"term":432,"updated":242,"__hash__":548},"glossary\u002F5.glossary\u002Fwhat-is-a-profit-factor.md","What Is Profit Factor? Formula, Good Values, Real Data",{"type":7,"value":262,"toc":530},[263,266,268,274,277,280,286,289,357,359,362,370,378,380,395,402,408,415,426,428,458,486,488,523],[10,264,265],{},"Profit factor is gross profit divided by gross loss: the total won across all winning trades, divided by the total lost across all losing trades. A profit factor of 1.50 means the account made $1.50 for every $1.00 it gave back. Below 1.00 the account loses money by construction, regardless of how often it wins.",[19,267,22],{"id":21},[27,269,272],{"className":270,"code":271,"language":32},[30],"Profit Factor = Gross Profit \u002F |Gross Loss|\n",[34,273,271],{"__ignoreMap":36},[10,275,276],{},"Note what the formula ignores: how long the account traded, how much capital it used, and how deep it fell along the way.",[10,278,279],{},"It can also be written in terms of win rate and average trade size, which is where it becomes diagnostic:",[27,281,284],{"className":282,"code":283,"language":32},[30],"Profit Factor = (Win Rate × Avg Win) \u002F ((1 − Win Rate) × Avg Loss)\n",[34,285,283],{"__ignoreMap":36},[10,287,288],{},"Two very different systems can land on the same value. A 30% win rate with winners four times the size of losers gives 1.71. An 80% win rate with winners half the size of losers gives 2.00. Both work; they fail differently and feel completely different to trade.",[290,291,292,305],"table",{},[293,294,295],"thead",{},[296,297,298,302],"tr",{},[299,300,301],"th",{},"Profit factor",[299,303,304],{},"Reading",[306,307,308,317,325,333,341,349],"tbody",{},[296,309,310,314],{},[311,312,313],"td",{},"Below 1.00",[311,315,316],{},"Loses money — structurally, not marginally",[296,318,319,322],{},[311,320,321],{},"1.00 – 1.10",[311,323,324],{},"Inside the noise. One bad week erases it",[296,326,327,330],{},[311,328,329],{},"1.10 – 1.30",[311,331,332],{},"Thin but real edge, if the sample is large",[296,334,335,338],{},[311,336,337],{},"1.30 – 2.00",[311,339,340],{},"A working strategy",[296,342,343,346],{},[311,344,345],{},"2.00 – 3.00",[311,347,348],{},"Strong. Check trade count and cost accounting",[296,350,351,354],{},[311,352,353],{},"Above 3.00",[311,355,356],{},"Rare on long histories: usually a short sample, a few outsized winners, or open losers not yet realised",[19,358,103],{"id":102},[10,360,361],{},"Profit factor is the cleanest single answer to \"does this system make money\", and it is much harder to dress up than a win rate, because every loss enters the denominator at full size.",[10,363,364,365,369],{},"It is not, however, a risk measure. Profit factor knows nothing about sequence: an account that made its money in one month and bled for eleven shows the same value as one that ground upward every week. Read it next to ",[51,366,368],{"href":367},"\u002Fglossary\u002Fwhat-is-maximum-drawdown","maximum drawdown",", or you are measuring the destination without the trip.",[10,371,372,373,377],{},"The same caution applies to a profit factor quoted from a ",[51,374,376],{"href":375},"\u002Fglossary\u002Fwhat-is-backtesting","backtest",": optimisers maximise exactly this ratio, so a high backtested value often measures the fitting process rather than the strategy.",[19,379,118],{"id":117},[10,381,382,383,386,387,394],{},"The figures below describe accounts published on ShowMyTrades, not traders in general. Across the published accounts that have trading history (August 2026), the ",[14,384,385],{},"median profit factor is 1.28"," and the ",[14,388,389,393],{},[51,390,392],{"href":391},"\u002Fguides\u002Fwin-rate-is-not-an-edge","median win rate"," is 68.8%",". Both are calculated after costs here: swap and commission are folded into each trade before it is classed as a winner or a loser, so 1.28 is net, not gross.",[10,396,397],{},[398,399],"img",{"alt":400,"src":401},"Medians across public ShowMyTrades accounts: a 68.8% win rate beside a 1.28 profit factor","\u002Fimages\u002Farticles\u002Fwin-rate-vs-payoff.svg",[10,403,404],{},[405,406,407],"em",{},"Two medians from the same set: the win rate looks strong, the edge behind it is thin.",[10,409,410,411,414],{},"That pairing is the point. Nearly seven trades in ten close green on the median account, and the whole edge still amounts to $1.28 earned for every $1.00 lost. Take an account sitting on both medians and invert the formula: its average winner is worth roughly ",[14,412,413],{},"0.58×"," its average loser. Winning often and earning well are separate achievements, and the first is far easier to manufacture — hold losers, cut winners, and the win rate climbs while the profit factor falls.",[10,416,417,418,421,422,425],{},"The median Sharpe ratio on the same set is ",[14,419,420],{},"0.05",", and the median account has ",[14,423,424],{},"171 closed trades",". At that sample size a profit factor above 3.00 is not evidence of a superior system; it is evidence that the sample is too small to have met its worst trade yet.",[19,427,154],{"id":153},[10,429,430,433,434,437,438,441,442,441,445,441,448,441,451,128,454,457],{},[14,431,432],{},"Profit Factor"," sits in the ",[14,435,436],{},"Advanced Statistics"," module on every published account page, alongside the numbers that explain it: ",[14,439,440],{},"Win Rate",", ",[14,443,444],{},"Avg. Win",[14,446,447],{},"Avg. Loss",[14,449,450],{},"Expectancy",[14,452,453],{},"Total Trades",[14,455,456],{},"Sharpe Ratio",". The six together say what the single ratio cannot.",[10,459,460,461,464,465,128,468,471,472,128,475,478,479,485],{},"Two product details matter. First, the costs already inside the ratio are itemised separately: the trades table carries ",[14,462,463],{},"Profit (Gross)"," with ",[14,466,467],{},"Swap",[14,469,470],{},"Commission"," as their own columns, and Advanced Statistics totals ",[14,473,474],{},"Total Commissions",[14,476,477],{},"Total Swap Paid",", so you can see how much the net figure absorbed. Across published accounts those totals stand at $4,782,670 in commissions and $862,547 in swap. Second, ",[51,480,482],{"href":481},"\u002Fguides\u002Fcustom-analysis-and-filter-presets",[14,483,484],{},"Custom Analysis"," recomputes the whole statistics block on a filtered subset — by date range, symbol, magic number, direction or lot size — which is how you check whether a profit factor holds up outside its best quarter or without its best symbol.",[19,487,195],{"id":194},[41,489,490,500,511,517],{},[44,491,492,495,496,17],{},[14,493,494],{},"\"Profit factor above 1 means I am profitable.\""," Only if costs are inside the ratio. Where they are not, a high-frequency system at 1.05 gross can be flat or negative ",[51,497,499],{"href":498},"\u002Fglossary\u002Fwhat-is-cost-percentage","once commission and swap are applied",[44,501,502,505,506,510],{},[14,503,504],{},"\"A high profit factor means low risk.\""," It says nothing about drawdown, position size or sequence. A martingale ",[51,507,509],{"href":508},"\u002Fglossary\u002Fwhat-is-position-sizing","position-sizing"," progression can post 4.00 right up to the day it does not.",[44,512,513,516],{},[14,514,515],{},"\"It is comparable across timeframes.\""," It is not annualised. A scalper's 1.20 over 20,000 trades and a swing trader's 1.20 over 60 are not the same statement.",[44,518,519,522],{},[14,520,521],{},"\"Open trades do not affect it.\""," They do, by absence. Floating losses left open are excluded from gross loss entirely, which inflates the ratio until the position is closed.",[10,524,525,526,17],{},"For which metrics to track over time and in what order, see ",[51,527,529],{"href":528},"\u002Fguides\u002Ftracking-trading-performance","the guide to tracking trading performance",{"title":36,"searchDepth":233,"depth":233,"links":531},[532,533,534,535,536],{"id":21,"depth":233,"text":22},{"id":102,"depth":233,"text":103},{"id":117,"depth":233,"text":118},{"id":153,"depth":233,"text":154},{"id":194,"depth":233,"text":195},"Profit factor is gross profit divided by gross loss. Below 1.0 an account loses by construction. Here are the bands and the 1.28 median across thousands of accounts.",false,{},"\u002Fglossary\u002Fwhat-is-a-profit-factor",[542,543,544,545],"what-is-drawdown","what-is-maximum-drawdown","what-is-position-sizing","what-is-backtesting",{"title":260,"description":537},"5.glossary\u002Fwhat-is-a-profit-factor","0loLRuqRU0mx9nEOfjdEFW6U1Fb_JAC1jN2JQSkIjuE",{"id":550,"title":551,"body":552,"category":241,"date":242,"description":789,"draft":244,"extension":245,"meta":790,"navigation":244,"path":206,"related":791,"seo":792,"stem":793,"term":794,"updated":242,"__hash__":795},"glossary\u002F5.glossary\u002Fwhat-is-an-equity-curve.md","What Is an Equity Curve? How to Read the Shape",{"type":7,"value":553,"toc":782},[554,557,559,565,568,574,579,585,588,618,620,628,631,633,651,666,677,679,700,720,743,745,776],[10,555,556],{},"An equity curve is a chart of an account's value over time. On a serious account page it is drawn as two lines rather than one: balance, which counts only closed trades, and equity, which adds the floating profit and loss of everything still open. The distance between them is the part of the story the account has not admitted yet.",[19,558,22],{"id":21},[27,560,563],{"className":561,"code":562,"language":32},[30],"Equity = Balance + Floating P&L on open positions\n",[34,564,562],{"__ignoreMap":36},[10,566,567],{},"When nothing is open, the two lines sit on top of each other. When positions are open, equity moves and balance does not. A losing position that is never closed keeps the balance line flat and pushes the equity line down; closing it drops the balance line to meet equity, which is why a \"sudden\" loss on a balance chart is usually weeks old.",[10,569,570],{},[398,571],{"alt":572,"src":573},"A smooth balance line with the equity line pulled below it by positions still open at a loss","\u002Fimages\u002Farticles\u002Fequity-vs-balance.svg",[10,575,576],{},[405,577,578],{},"A balance line stays tidy for as long as the losers stay open.",[10,580,581,582,584],{},"Deposits and withdrawals move both lines vertically without any trading happening, which is why a raw curve cannot be read as a return. That correction is what ",[51,583,81],{"href":80}," exists to make.",[10,586,587],{},"The shape carries as much information as the endpoint:",[41,589,590,596,602,612],{},[44,591,592,595],{},[14,593,594],{},"Jagged, rising, with visible pullbacks."," Normal. Every strategy has losing runs, and their absence is the anomaly.",[44,597,598,601],{},[14,599,600],{},"A near-straight diagonal on the balance line."," A warning, not a compliment. It usually means losers are held open while winners are closed — grid, averaging-down or martingale behaviour — and the risk has moved into the equity line where a balance-only chart cannot show it.",[44,603,604,607,608,17],{},[14,605,606],{},"Long flat stretches broken by vertical steps."," Position sizing changed, or the account traded rarely and heavily. ",[51,609,611],{"href":610},"\u002Fguides\u002Fhow-much-history-a-track-record-needs","Read the trade count before reading the slope",[44,613,614,617],{},[14,615,616],{},"A clean climb that ends abruptly."," The classic single-blow-up shape: many small wins funding one loss large enough to end the account.",[19,619,103],{"id":102},[10,621,622,623,627],{},"The curve is where duration becomes visible. A headline number tells you the worst ",[51,624,626],{"href":625},"\u002Fglossary\u002Fwhat-is-drawdown","drawdown"," was 18%; only the curve tells you it lasted nine months, which is the part people actually quit over.",[10,629,630],{},"It is also the fastest lie detector on a track record. Claims are made about returns, rarely about shape, and the shape is much harder to manufacture — a balance line that has never had a bad week either did not trade through one or is not closing its bad trades.",[19,632,118],{"id":117},[10,634,382,635,638,639,642,643,646,647,650],{},[14,636,637],{},"median deepest drawdown is 9.7%"," measured on equity. ",[14,640,641],{},"38.5%"," of accounts have never been more than 5% below their own peak, ",[14,644,645],{},"38.2%"," have been more than 20% below it, and ",[14,648,649],{},"17.6%"," more than 50% below.",[10,652,653,654,657,658,662,663,665],{},"Set that beside a ",[14,655,656],{},"median time-weighted return of +3.2%"," and the honest shape appears: modest slope, real dents, and ",[51,659,661],{"href":660},"\u002Fglossary\u002Fwhat-is-recovery-factor","a worst dent several times larger than the eventual gain",". The median account arrived there over ",[14,664,424],{},", which is the context every smooth-looking curve has to be read against — the fewer trades behind a curve, the less its smoothness can mean.",[10,667,668,669,672,673,676],{},"The equity-versus-balance gap is measurable too. Every account carries both a ",[14,670,671],{},"Drawdown"," figure on equity and a ",[14,674,675],{},"DD on Balance"," figure on closed results only. A wide gap between the two is the numeric version of the straight-diagonal warning: the balance line is being kept tidy by positions that are still open.",[19,678,154],{"id":153},[10,680,681,682,685,686,441,689,441,692,441,694,128,697,699],{},"The ",[14,683,684],{},"charts viewer"," on every published account page is a single panel that switches between five views — ",[14,687,688],{},"Growth",[14,690,691],{},"Balance",[14,693,179],{},[14,695,696],{},"Growth by Trade",[14,698,671],{}," — rather than a stack of separate charts.",[10,701,702,704,705,128,707,709,710,712,713,715,716,719],{},[14,703,691],{}," is the equity curve proper. It draws two named series, ",[14,706,691],{},[14,708,211],{},", with a legend, so the floating gap is visible rather than inferred; deposits and withdrawals are marked on the line, so a jump reads as funding rather than trading. ",[14,711,688],{}," replots the same account as compounded time-weighted return, with cash flows removed. ",[14,714,671],{}," plots the daily distance below the high-water mark as bars, which is where the ",[405,717,718],{},"length"," of a decline is readable.",[10,721,722,723,725,726,441,728,730,731,734,735,128,737,739,740,742],{},"The numeric anchors are in the ",[14,724,162],{}," panel: ",[14,727,691],{},[14,729,211],{}," — printed as a percentage of balance alongside the amount, so a large floating loss is obvious at a glance — and ",[14,732,733],{},"Highest $",", the peak the account has ever reached. ",[14,736,671],{},[14,738,675],{}," sit on the two rows below ",[14,741,172],{}," in the same panel.",[19,744,195],{"id":194},[41,746,747,755,761,770],{},[44,748,749,752,753,17],{},[14,750,751],{},"\"A smooth equity curve means low risk.\""," It often means the opposite. Smoothness on the balance line is the signature of never realising a loss, and the risk is sitting in the equity line and in ",[51,754,368],{"href":367},[44,756,757,760],{},[14,758,759],{},"\"The equity curve is the balance chart.\""," Balance is closed trades only. Equity includes open ones, and the difference is exactly the amount not yet accounted for.",[44,762,763,766,767,769],{},[14,764,765],{},"\"The curve rose, so the trading worked.\""," Not until deposits are removed. That is why Gain on our pages is time-weighted and ",[51,768,16],{"href":247}," is shown separately.",[44,771,772,775],{},[14,773,774],{},"\"A new high means the account recovered.\""," It means balance recovered. If it was reached by increasing position size after a loss, the account did not recover — it doubled down and got away with it.",[10,777,778,779,17],{},"For how a curve's shape gives away a manufactured result, see ",[51,780,781],{"href":109},"spotting fake EA results",{"title":36,"searchDepth":233,"depth":233,"links":783},[784,785,786,787,788],{"id":21,"depth":233,"text":22},{"id":102,"depth":233,"text":103},{"id":117,"depth":233,"text":118},{"id":153,"depth":233,"text":154},{"id":194,"depth":233,"text":195},"An equity curve plots account value over time. The gap between the balance line and the equity line is where hidden losses live. What public accounts show.",{},[249,542,543,252],{"title":551,"description":789},"5.glossary\u002Fwhat-is-an-equity-curve","Equity Curve","oMmcx1zz2Z_azfQbvDq8VzDwHBifFJwBHIMfz8JKzFc",{"id":797,"title":798,"body":799,"category":1004,"date":242,"description":1005,"draft":244,"extension":245,"meta":1006,"navigation":244,"path":1007,"related":1008,"seo":1011,"stem":1012,"term":675,"updated":242,"__hash__":1013},"glossary\u002F5.glossary\u002Fwhat-is-drawdown-on-balance.md","What Is Drawdown on Balance? DD on Balance",{"type":7,"value":800,"toc":997},[801,818,820,823,829,832,835,838,864,866,869,874,879,892,894,916,931,933,949,962,964,990],[10,802,803,804,807,808,812,813,815,816,17],{},"Drawdown on balance is the deepest peak-to-trough fall an account's ",[14,805,806],{},"closed"," balance has ever taken, ignoring the unrealised profit and loss of open positions. It counts a loss only once realised, which makes it the more forgiving of the two drawdown figures on a ",[51,809,811],{"href":810},"\u002Fglossary\u002Fwhat-is-a-track-record","track record",". On ShowMyTrades it is published as ",[14,814,675],{},", always beside the equity-based ",[14,817,671],{},[19,819,22],{"id":21},[10,821,822],{},"Both are worst-ever readings against the same high-water mark, drawn on balance. What differs is the value compared against it, and how often:",[27,824,827],{"className":825,"code":826,"language":32},[30],"Peak = high-water mark of closed balance, rescaled by every cash flow\n\nDD on Balance % = worst of (Balance − Peak) \u002F Peak × 100              at every trade\nDrawdown %      = worst of (min(Balance, Equity) − Peak) \u002F Peak × 100  once a day\n                  where Equity = Balance + floating P&L on open positions\n",[34,828,826],{"__ignoreMap":36},[10,830,831],{},"The balance rolls forward from the account's own history, every closed trade entering net of its commission and swap. The peak ratchets upward on trading gains and never falls on its own. Both are historical worsts, not today's position, so neither ever improves.",[10,833,834],{},"Cash flows are handled deliberately: a deposit or withdrawal scales the peak by exactly the factor it scales the balance, so money moving in or out neither creates a drawdown nor repairs one. Both are floored at −100%, so a balance driven below zero by a stop-out reads as a total loss.",[10,836,837],{},"Because the two share a peak, the pair reads as one measurement:",[41,839,840,846,852,858],{},[44,841,842,845],{},[14,843,844],{},"The two are close."," Positions are closed near where they went wrong. Little is being carried.",[44,847,848,851],{},[14,849,850],{},"Equity drawdown is far larger."," Losers are being held open. The account reports its losses late, and the balance figure is describing bookkeeping rather than risk.",[44,853,854,857],{},[14,855,856],{},"The two are identical."," Either no floating loss ever coincided with a high-water moment, or no floating history exists for that stretch.",[44,859,860,863],{},[14,861,862],{},"Balance drawdown is the larger one."," Usually the sampling gap: balance is checked at every trade, equity only on daily closing values, so a hole opened and refilled inside one day shows in the first and not the second.",[19,865,103],{"id":102},[10,867,868],{},"The gap between them is the clearest single tell for a system that never closes a loser. Grid, martingale and averaging-down strategies produce a smooth balance curve by construction: a position that is never closed never touches the balance. Their equity tells a different story, and it is the equity story that ends the account.",[10,870,871],{},[398,872],{"alt":873,"src":573},"A smooth balance line beside an equity line pulled below it by open positions held at a loss",[10,875,876],{},[405,877,878],{},"The gap between the two lines is the loss the balance figure has not been told about yet.",[10,880,881,882,886,887,891],{},"That is not interpretation. Margin is calculated on equity, so ",[51,883,885],{"href":884},"\u002Fglossary\u002Fwhat-is-margin-level","margin level"," and any ",[51,888,890],{"href":889},"\u002Fglossary\u002Fwhat-is-a-margin-call","margin call"," follow the equity line and ignore the balance line entirely. A record showing solid gains against a 3% balance drawdown next to a 45% equity drawdown is not a low-risk system: it was 45% underwater and had not admitted it. Where the two converge, that convergence is evidence in its own right — losses were taken when they occurred.",[19,893,118],{"id":117},[10,895,896,897,899,900,902,903,906,907,909,910,912,913,915],{},"The figures below describe accounts published on ShowMyTrades, not traders in general. Across the ",[14,898,138],{}," (August 2026), the median deepest ",[51,901,626],{"href":625}," is ",[14,904,905],{},"9.7%",". The tails are wide: ",[14,908,641],{}," of accounts have never been more than 5% below their peak, while ",[14,911,645],{}," have been more than 20% underwater and ",[14,914,649],{}," more than 50%.",[10,917,918,919,922,923,128,927,930],{},"That first group is where the pair earns its keep: a record under 5% is either tight risk control or a floating loss not yet realised, and the two look identical on a balance chart. Most of this population is automated — the median account runs ",[14,920,921],{},"99%"," of its trades through an ",[51,924,926],{"href":925},"\u002Fglossary\u002Fwhat-is-an-expert-advisor","automated system",[14,928,929],{},"53.9%"," are more than 90% automated — and a robot holding a loser neither tires nor loses its nerve.",[19,932,154],{"id":153},[10,934,935,937,938,940,941,943,944,948],{},[14,936,675],{}," sits directly under ",[14,939,671],{}," in the ",[14,942,162],{}," panel, on every published account page and in the ",[51,945,947],{"href":946},"\u002Fguides\u002Ftrading-widgets-and-embeds","Complete Dashboard widget",". Those two rows are the panel's whole risk block, set off by a rule with no heading above them. The value comes from our statistics service, computed over the account's synchronised history rather than entered by anyone, and printed without its minus sign.",[10,950,951,952,954,955,957,958,961],{},"Two other places on the page complete the picture. The ",[14,953,211],{}," row shows equity as a percentage of balance — under 100% means open positions are underwater right now, and that shortfall is exactly what DD on Balance excludes. In the charts viewer, the ",[14,956,671],{}," view plots daily drawdown as bars over the account's life, making the ",[405,959,960],{},"duration"," of a decline visible rather than inferred.",[19,963,195],{"id":194},[41,965,966,972,978,984],{},[44,967,968,971],{},[14,969,970],{},"\"The lower number is the real risk.\""," The lower number is usually DD on Balance, and it is the optimistic one by construction.",[44,973,974,977],{},[14,975,976],{},"\"It excludes trading costs.\""," It does not. Every closed trade enters the balance with its commission and swap already applied.",[44,979,980,983],{},[14,981,982],{},"\"A withdrawal shows up as a drawdown.\""," It does not. A cash movement scales the high-water mark by the same factor as the balance. Deposits cannot mend a drawdown either.",[44,985,986,989],{},[14,987,988],{},"\"Both numbers see the same detail.\""," The equity figure is sampled once a day, so a fall and full recovery inside one session leaves no trace in it.",[10,991,992,993,17],{},"For the full method, including why depth and duration are separate questions, see ",[51,994,996],{"href":995},"\u002Fguides\u002Fmaximum-drawdown-explained","maximum drawdown explained",{"title":36,"searchDepth":233,"depth":233,"links":998},[999,1000,1001,1002,1003],{"id":21,"depth":233,"text":22},{"id":102,"depth":233,"text":103},{"id":117,"depth":233,"text":118},{"id":153,"depth":233,"text":154},{"id":194,"depth":233,"text":195},"Risk","DD on Balance is the deepest peak-to-trough fall in closed results only. How to read it against equity drawdown, and what published accounts show.",{},"\u002Fglossary\u002Fwhat-is-drawdown-on-balance",[542,543,1009,1010],"what-is-margin-level","what-is-absolute-gain",{"title":798,"description":1005},"5.glossary\u002Fwhat-is-drawdown-on-balance","YNssKoit9sr03-dJpxHlpf4_3O1G9oJAiUxBNeg6S-M",{"id":1015,"title":1016,"body":1017,"category":241,"date":242,"description":1218,"draft":244,"extension":245,"meta":1219,"navigation":244,"path":80,"related":1220,"seo":1223,"stem":1224,"term":1225,"updated":242,"__hash__":1226},"glossary\u002F5.glossary\u002Fwhat-is-time-weighted-return.md","What Is Time-Weighted Return (TWR)?",{"type":7,"value":1018,"toc":1211},[1019,1025,1027,1030,1036,1039,1046,1052,1057,1065,1071,1074,1076,1079,1091,1093,1102,1121,1133,1135,1151,1172,1174,1204],[10,1020,1021,1022,1024],{},"Time-weighted return, or TWR, measures the return produced by trading decisions alone, with deposits and withdrawals removed. It cuts the account's history at every cash flow, measures each piece separately, and compounds the pieces together. It is the number shown as ",[14,1023,76],{}," on ShowMyTrades account pages.",[19,1026,22],{"id":21},[10,1028,1029],{},"Money moving in or out changes the balance without anyone trading. TWR handles that by never letting a cash flow enter a return calculation:",[27,1031,1034],{"className":1032,"code":1033,"language":32},[30],"TWR = [(1 + r₁) × (1 + r₂) × … × (1 + rₙ)] − 1\n\nrᵢ = Profit in period i \u002F Balance at the start of period i\n",[34,1035,1033],{"__ignoreMap":36},[10,1037,1038],{},"Each period runs between cash flows. A deposit ends one period and starts the next at the new, larger balance; it never appears in a numerator. On ShowMyTrades the sub-periods are days: each day's return is measured against the balance standing at its start, net of the costs charged inside it, and the days are compounded.",[10,1040,1041,1042,1045],{},"Worth stating plainly. Fund an account with $10,000 and make $2,000: the first period returned 20%. Deposit another $10,000, taking the balance to $22,000, then make $2,000 again: the second period returned 9.1%, because the base was larger. The balance shows +$4,000 on $20,000 put in. TWR shows (1 + 0.20) × (1 + 0.091) − 1 = ",[14,1043,1044],{},"+30.9%",". The deposit itself earned nothing.",[10,1047,1048],{},[398,1049],{"alt":1050,"src":1051},"A $10,000 deposit steps the balance line up while the time-weighted return line stays exactly where it was","\u002Fimages\u002Farticles\u002Fdeposit-vs-twr.svg",[10,1053,1054],{},[405,1055,1056],{},"The balance jumps the day money arrives. Gain does not.",[10,1058,1059,1060,1064],{},"This is what separates it from ",[14,1061,1062],{},[51,1063,16],{"href":247},", the other percentage on the same panel:",[27,1066,1069],{"className":1067,"code":1068,"language":32},[30],"Abs. Gain = Net closed P&L \u002F Total deposits × 100\n",[34,1070,1068],{"__ignoreMap":36},[10,1072,1073],{},"Abs. Gain answers what the account returned on the money put in; TWR answers how well the money was traded. Both are honest, but only one is comparable across accounts of different sizes and funding patterns.",[19,1075,103],{"id":102},[10,1077,1078],{},"TWR is the reason a track record can be compared at all. Without it, a percentage can be improved by depositing into a drawdown: a $5,000 loss on a $10,000 account is −50%, and a $10,000 top-up the next day makes the same unrecovered hole read as −33% of the new balance.",[10,1080,1081,1082,1085,1086,1090],{},"It cuts the other way too, which is why it is the fair number rather than the flattering one. A withdrawal does not raise TWR, and a well-timed deposit before a good month does not either. What remains is the ",[51,1083,1084],{"href":206},"equity curve"," of decisions — the only part a reader of a ",[51,1087,1089],{"href":1088},"\u002Fglossary\u002Fwhat-is-a-verified-track-record","verified track record"," can hold the trader responsible for.",[19,1092,118],{"id":117},[10,1094,382,1095,1098,1099,1101],{},[14,1096,1097],{},"median time-weighted return is +3.2%",", and ",[14,1100,149],{}," of them are positive on a time-weighted basis.",[10,1103,1104,1105,1111,1112,1114,1115,1118,1119,915],{},"Two readings follow. First, a majority of published accounts do make money by this measure — the distribution is not the wasteland the internet claims. Second, the middle of that distribution is small: +3.2% against a ",[14,1106,1107,1108,1110],{},"median deepest ",[51,1109,626],{"href":625}," of 9.7%",", so the typical account gave up about three times its eventual return along the way. The same set shows ",[14,1113,645],{}," of accounts having been ",[51,1116,1117],{"href":367},"more than 20% underwater"," at some point, and ",[14,1120,649],{},[10,1122,1123,1124,1126,1127,1129,1130,17],{},"The median account here has ",[14,1125,424],{},", drawn from ",[14,1128,142],{}," overall. A large TWR on a short history is ",[51,1131,1132],{"href":610},"a statement about a few weeks, not about a method",[19,1134,154],{"id":153},[10,1136,1137,1139,1140,1142,1143,1145,1146,128,1148,1150],{},[14,1138,76],{}," is the first and boldest row of the ",[14,1141,162],{}," panel on every published account page, and it is TWR. ",[14,1144,16],{}," sits directly beneath it so the funding-sensitive figure is never far from the funding-neutral one. ",[14,1147,169],{},[14,1149,172],{},", the next two rows down, are derived from the same time-weighted series.",[10,1152,681,1153,1155,1156,1158,1159,1161,1162,1164,1165,1171],{},[14,1154,684],{}," — one panel that switches views rather than a stack of charts — plots it two ways. ",[14,1157,688],{}," shows daily compounded TWR over the life of the account; ",[14,1160,696],{}," plots the same series against trade number instead of the calendar, which makes frequency visible: two accounts at +40% look identical on a calendar and completely different when one took 90 trades and the other 9,000. The ",[14,1163,691],{}," view shows the raw money, deposits and withdrawals included, which is exactly the picture TWR is designed to correct. The ",[14,1166,1167],{},[51,1168,1170],{"href":1169},"\u002Fguides\u002Fmonthly-returns-table-explained","monthly returns table"," breaks the same time-weighted series into months and years.",[19,1173,195],{"id":194},[41,1175,1176,1182,1192,1198],{},[44,1177,1178,1181],{},[14,1179,1180],{},"\"TWR is how much money I made.\""," It is not a currency figure. An account can show +80% TWR and a small profit if it was traded at a small size for most of its life.",[44,1183,1184,1187,1188,1191],{},[14,1185,1186],{},"\"My deposit lowered my Gain.\""," It cannot. A deposit ends one measurement period and starts another; it contributes no return in either direction. What people usually notice is that the deposit failed to ",[405,1189,1190],{},"raise"," the percentage the way the balance chart did.",[44,1193,1194,1197],{},[14,1195,1196],{},"\"TWR and Abs. Gain should agree.\""," They agree only on an account with a single deposit and no withdrawals. Any divergence is information about funding, not an error.",[44,1199,1200,1203],{},[14,1201,1202],{},"\"It is an annual figure.\""," It is cumulative since the account's first trade, and it is not annualised. A +3.2% over three years and a +3.2% over three months are different results.",[10,1205,1206,1207,17],{},"For worked examples, including how a deposit hides a drawdown, see ",[51,1208,1210],{"href":1209},"\u002Fguides\u002Ftime-weighted-return-explained","time-weighted return explained",{"title":36,"searchDepth":233,"depth":233,"links":1212},[1213,1214,1215,1216,1217],{"id":21,"depth":233,"text":22},{"id":102,"depth":233,"text":103},{"id":117,"depth":233,"text":118},{"id":153,"depth":233,"text":154},{"id":194,"depth":233,"text":195},"Time-weighted return compounds sub-period returns so deposits and withdrawals drop out. The formula, how it differs from Abs. Gain, and public accounts.",{},[251,542,1221,1222],"what-is-a-verified-track-record","what-is-expectancy",{"title":1016,"description":1218},"5.glossary\u002Fwhat-is-time-weighted-return","Time-Weighted Return","xsUg8bgIFRZ18pjGPDUe3u66QKPQWOoj4hi9EmB2Cow",1787415687039]