[{"data":1,"prerenderedAt":897},["ShallowReactive",2],{"\u002Fglossary\u002Fwhat-is-trend-following":3,"\u002Fglossary\u002Fwhat-is-trend-following-related":236},{"id":4,"title":5,"body":6,"category":221,"date":222,"description":223,"draft":224,"extension":225,"meta":226,"navigation":224,"path":227,"related":228,"seo":232,"stem":233,"term":234,"updated":222,"__hash__":235},"glossary\u002F5.glossary\u002Fwhat-is-trend-following.md","What Is Trend Following? Definition and Real Numbers",{"type":7,"value":8,"toc":213},"minimark",[9,13,18,27,30,41,44,52,56,59,67,71,105,108,115,119,152,174,178,206],[10,11,12],"p",{},"Trend following is a class of strategy that enters in the direction of a price move already under way and stays in until the move ends. It usually wins fewer than half its trades and earns its return from a small number of large winners. The defining property is the shape of the payoff, not the entry signal.",[14,15,17],"h2",{"id":16},"how-it-works","How it works",[10,19,20,21,26],{},"The entry is deliberately unremarkable: a breakout of an N-day range, a ",[22,23,25],"a",{"href":24},"\u002Fglossary\u002Fwhat-is-a-moving-average","moving average"," crossover, a new high in a ranked universe. The exit does the work — a trailing stop that keeps the position while the move continues and gives back a fixed portion of the profit when it stops.",[10,28,29],{},"Everything then hangs on one arithmetic identity, the same one the platform uses for Expectancy:",[31,32,37],"pre",{"className":33,"code":35,"language":36},[34],"language-text","Expectancy = (Win rate × Avg win) − (Loss rate × Avg loss)\n\nTrend example:  0.35 × 3.0R − 0.65 × 1.0R = +0.40R per trade\nScalping example: 0.85 × 0.4R − 0.15 × 2.0R = +0.04R per trade\n","text",[38,39,35],"code",{"__ignoreMap":40},"",[10,42,43],{},"Both are profitable. The first loses on nearly two trades out of three and is the stronger system. A win rate read without the average win and average loss beside it carries no information at all.",[10,45,46,47,51],{},"Because the return is concentrated in a handful of trades, ",[22,48,50],{"href":49},"\u002Fglossary\u002Fwhat-is-position-sizing","position sizing"," is not a refinement here, it is the strategy. Size too small on the trades that run and the tail that pays for everything is cut off.",[14,53,55],{"id":54},"why-it-matters","Why it matters",[10,57,58],{},"The cost of the structure is time spent losing. A trend system will produce long flat stretches punctuated by sharp advances, and the flat stretches are where people abandon it — usually shortly before the move that would have paid for them. Judging one over a quarter tells you about that quarter's market, not about the system.",[10,60,61,62,66],{},"It also means the ",[22,63,65],{"href":64},"\u002Fglossary\u002Fwhat-is-drawdown","drawdown"," is not a malfunction. It is the entry fee, paid in advance, every time.",[14,68,70],{"id":69},"what-the-data-shows","What the data shows",[10,72,73,74,78,79,83,84,87,88,91,92,95,96,100,101,104],{},"Across the public accounts on ShowMyTrades with trading history (August 2026), the median win rate is ",[75,76,77],"strong",{},"68.8%",", the median ",[22,80,82],{"href":81},"\u002Fglossary\u002Fwhat-is-a-profit-factor","profit factor"," is ",[75,85,86],{},"1.28",", and the median trade lasts ",[75,89,90],{},"2.4 hours",". The median account has closed ",[75,93,94],{},"171 trades"," and shows a ",[22,97,99],{"href":98},"\u002Fglossary\u002Fwhat-is-the-sharpe-ratio","Sharpe ratio"," of ",[75,102,103],{},"0.05",".",[10,106,107],{},"That is close to the mirror image of a trend follower: high hit rate, short holding period, and a profit factor barely above break-even — the classic signature of many small wins funding occasional large losses. It is worth knowing what the crowd you are being compared against actually looks like.",[10,109,110,111,104],{},"The sample point matters too. At a median of 171 closed trades, a trend system winning 35% of the time has produced roughly 60 winners, and the bulk of its return may sit in eight or ten of them. Remove those and the record is negative. That is not fragility in the account, it is what the payoff structure guarantees, and it is why these systems ",[22,112,114],{"href":113},"\u002Fguides\u002Fhow-much-history-a-track-record-needs","need years rather than months before the numbers mean anything",[14,116,118],{"id":117},"where-you-see-it-on-showmytrades","Where you see it on ShowMyTrades",[10,120,121,122,125,126,129,130,133,134,137,138,144,145,133,148,151],{},"The Advanced Statistics block is where the structure becomes visible. Read ",[75,123,124],{},"Win Rate"," together with ",[75,127,128],{},"Avg. Win",", ",[75,131,132],{},"Avg. Loss"," and ",[75,135,136],{},"Expectancy"," — a low win rate beside a large average win is a working trend system, and a high win rate beside a much larger average loss is the opposite. ",[75,139,140],{},[22,141,143],{"href":142},"\u002Fglossary\u002Fwhat-is-average-trade-length","Avg. Trade Length"," tells you whether the holding period matches the claimed style; a \"trend following\" account whose average trade lasts nine minutes is something else. ",[75,146,147],{},"Longs Won",[75,149,150],{},"Shorts Won"," show whether the record is a genuine two-sided system or a directional bet on one market that trended.",[10,153,154,155,158,159,165,166,169,170,173],{},"The ",[75,156,157],{},"Drawdown"," view in the charts viewer is the underwater plot: it shows how deep, how often and above all how long, which is the number that decides whether a trend system is investable. The ",[75,160,161],{},[22,162,164],{"href":163},"\u002Fguides\u002Fmonthly-returns-table-explained","Monthly Returns table"," exposes the flat and red stretches the equity curve smooths over, and the ",[75,167,168],{},"Custom Analysis"," panel's ",[75,171,172],{},"Trade Duration (seconds)"," filter lets you separate the long holds from the noise on a mixed account.",[14,175,177],{"id":176},"common-misunderstandings","Common misunderstandings",[179,180,181,188,194,200],"ul",{},[182,183,184,187],"li",{},[75,185,186],{},"\"A 35% win rate means the system is broken.\""," It means nothing on its own. Pair it with Avg. Win and Avg. Loss, then read Expectancy.",[182,189,190,193],{},[75,191,192],{},"\"I'll tighten the stop to raise the win rate.\""," Tighter stops raise the hit rate and cut the tail that produces the return. It is the most reliable way to convert a profitable trend system into a losing one.",[182,195,196,199],{},[75,197,198],{},"\"It underperformed for eight months, so it stopped working.\""," Eight flat months is a normal interval for this structure, not a verdict.",[182,201,202,205],{},[75,203,204],{},"\"The 68.8% win rate account is safer.\""," A high win rate is the easiest metric to engineer and the least predictive. Check the average loss before concluding anything.",[10,207,208,209,104],{},"Every metric named above is explained module by module in ",[22,210,212],{"href":211},"\u002Fguides\u002Freading-a-trading-account-dashboard","how to read a trading account dashboard",{"title":40,"searchDepth":214,"depth":214,"links":215},2,[216,217,218,219,220],{"id":16,"depth":214,"text":17},{"id":54,"depth":214,"text":55},{"id":69,"depth":214,"text":70},{"id":117,"depth":214,"text":118},{"id":176,"depth":214,"text":177},"Strategy","2026-08-19T00:00:00.000Z","Trend following buys strength and sells weakness, taking many small losses to catch a few large wins. Why the payoff structure matters more than the win rate.",true,"md",{},"\u002Fglossary\u002Fwhat-is-trend-following",[229,230,231],"what-is-a-moving-average","what-is-a-profit-factor","what-is-drawdown",{"title":5,"description":223},"5.glossary\u002Fwhat-is-trend-following","Trend Following","ansAwU3eNBt0UEtY5gNktLLC3lMWY3UVH_0PfLw4gIA",[237,423,697],{"id":238,"title":239,"body":240,"category":221,"date":222,"description":413,"draft":224,"extension":225,"meta":414,"navigation":224,"path":24,"related":415,"seo":419,"stem":420,"term":421,"updated":222,"__hash__":422},"glossary\u002F5.glossary\u002Fwhat-is-a-moving-average.md","What Is a Moving Average? SMA vs EMA, Explained",{"type":7,"value":241,"toc":406},[242,245,247,250,256,259,262,265,267,275,278,280,299,310,313,315,318,361,363,399],[10,243,244],{},"A moving average is the average price of an instrument over a fixed number of recent periods, recalculated on every new bar. It converts a jagged price series into a single line that follows the market with a delay. That delay is not a defect to be tuned away; it is what the calculation is.",[14,246,17],{"id":16},[10,248,249],{},"The two common forms differ only in how they weight the past.",[31,251,254],{"className":252,"code":253,"language":36},[34],"SMA(n) = (P1 + P2 + ... + Pn) \u002F n\n\nEMA(n): k = 2 \u002F (n + 1)\n        EMA_today = (Price_today × k) + (EMA_yesterday × (1 − k))\n",[38,255,253],{"__ignoreMap":40},[10,257,258],{},"The simple moving average weights every period equally and drops the oldest bar completely when a new one arrives. This has a consequence people rarely account for: an SMA can turn because of a bar that left the window, not because of anything that just happened.",[10,260,261],{},"The exponential moving average weights recent prices more heavily and never fully discards old data — each past bar's influence decays geometrically. It responds sooner to a change in direction, and it produces more false turns for the same reason.",[10,263,264],{},"Lag is measurable. For a price series moving in a straight line, an SMA of n periods sits roughly (n−1)\u002F2 periods behind. A 200-period average of daily bars is, by construction, describing where price was about a hundred days ago. Shortening the period reduces the lag and increases the number of times the line reverses on noise. There is no setting that removes both.",[14,266,55],{"id":54},[10,268,269,270,274],{},"Every rule built on a moving average inherits the lag. You enter after the move has started and exit after it has ended, and you pay the ",[22,271,273],{"href":272},"\u002Fglossary\u002Fwhat-is-a-spread","spread",", the commission and any slippage on each of those transactions. In a trending market that cost is small against the move captured. In a range it is the whole result: the line crosses back and forth, each cross is a paid transaction, and the account bleeds without a single dramatic loss.",[10,276,277],{},"This is why a moving average is a component, not a strategy. It says something about the recent average price. It says nothing about position size, stop placement, or whether the current market is the kind the rule works in.",[14,279,70],{"id":69},[10,281,282,283,285,286,288,289,83,291,293,294,298],{},"Across the public accounts on ShowMyTrades with trading history (August 2026), the median account has closed ",[75,284,94],{},", the median trade lasts ",[75,287,90],{},", and the median ",[22,290,82],{"href":81},[75,292,86],{},". A crossing rule read on an intraday timeframe fits that shape closely: frequent entries, short holds, and a margin over break-even thin enough for ",[22,295,297],{"href":296},"\u002Fglossary\u002Fwhat-is-cost-percentage","transaction cost"," to decide the outcome.",[10,300,301,302,305,306,309],{},"Turnover is therefore the figure to hold against any crossover system. Those accounts have traded ",[75,303,304],{},"1,724,575 lots",", and the commission billed on that volume comes to ",[75,307,308],{},"$4,782,670",". A signal rule that fires more often does not merely need to be right more often — it needs to be right by enough to cover a fee levied on every crossing.",[10,311,312],{},"One honest limit: ShowMyTrades does not infer which indicator or expert advisor produced a trade, so none of these figures can be attributed to moving-average systems specifically. They describe the whole published population, which is the only thing they can honestly describe.",[14,314,118],{"id":117},[10,316,317],{},"The charts viewer plots equity, growth, profit and drawdown — the account, not the price chart. There are no indicator overlays, because the platform's job is to show what a strategy did, not to help design one.",[10,319,320,321,326,327,330,331,129,333,133,336,339,340,129,343,133,345,348,349,352,353,356,357,360],{},"What you can do is measure an MA-based system's real behaviour. In ",[22,322,324],{"href":323},"\u002Fguides\u002Fcustom-analysis-and-filter-presets",[75,325,168],{},", filter by ",[75,328,329],{},"Magic Numbers"," to isolate a single expert advisor on a shared account, then narrow with ",[75,332,172],{},[75,334,335],{},"Days of Week",[75,337,338],{},"Trading Hours (Server Time)"," to see when the rule actually fires. In Advanced Statistics, ",[75,341,342],{},"Total Trades",[75,344,143],{},[75,346,347],{},"Total Commissions"," together tell you whether the turnover is being paid for. The ",[75,350,351],{},"Breakdown Statistics"," panel, on its ",[75,354,355],{},"By Symbol"," tab, shows whether the result came from one instrument that happened to trend — which for any ",[22,358,359],{"href":227},"trend following"," rule is the question that matters.",[14,362,177],{"id":176},[179,364,365,376,382,388],{},[182,366,367,370,371,375],{},[75,368,369],{},"\"The crossover is the system.\""," A crossover is an entry trigger. Without sizing, an exit and a cost assumption it is not a strategy, and the ",[22,372,374],{"href":373},"\u002Fglossary\u002Fwhat-is-backtesting","backtest"," of it is measuring the market, not the method.",[182,377,378,381],{},[75,379,380],{},"\"The 200-day average is significant because everyone watches it.\""," Popularity produces attention, not edge. Nothing in our data supports or refutes any specific period, and no honest source can offer you one.",[182,383,384,387],{},[75,385,386],{},"\"EMA is better because it reacts faster.\""," Faster reaction means earlier entries and more false ones. The choice is a trade-off, not an upgrade.",[182,389,390,393,394,398],{},[75,391,392],{},"\"I optimised the period and 34 worked best.\""," Selecting a period because it performed best on history you have already seen is ",[22,395,397],{"href":396},"\u002Fglossary\u002Fwhat-is-curve-fitting","curve fitting",", whatever the number turns out to be.",[10,400,401,402,104],{},"For the metrics that tell you whether any rule-based system is actually earning its costs, see ",[22,403,405],{"href":404},"\u002Fguides\u002Ftracking-trading-performance","tracking your trading performance",{"title":40,"searchDepth":214,"depth":214,"links":407},[408,409,410,411,412],{"id":16,"depth":214,"text":17},{"id":54,"depth":214,"text":55},{"id":69,"depth":214,"text":70},{"id":117,"depth":214,"text":118},{"id":176,"depth":214,"text":177},"A moving average is the mean price over the last N periods, recalculated each bar. What SMA and EMA compute, and why lag is the defining property, not a flaw.",{},[416,417,418],"what-is-trend-following","what-is-backtesting","what-is-curve-fitting",{"title":239,"description":413},"5.glossary\u002Fwhat-is-a-moving-average","Moving Average","fSTZnlt5snHSK_X5ZaAwnsqskFiY3lqkUulG-uElNkA",{"id":424,"title":425,"body":426,"category":687,"date":222,"description":688,"draft":689,"extension":225,"meta":690,"navigation":224,"path":81,"related":691,"seo":694,"stem":695,"term":594,"updated":222,"__hash__":696},"glossary\u002F5.glossary\u002Fwhat-is-a-profit-factor.md","What Is Profit Factor? Formula, Good Values, Real Data",{"type":7,"value":427,"toc":680},[428,431,433,439,442,445,451,454,522,524,527,535,541,543,558,565,571,578,588,590,614,639,641,674],[10,429,430],{},"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.",[14,432,17],{"id":16},[31,434,437],{"className":435,"code":436,"language":36},[34],"Profit Factor = Gross Profit \u002F |Gross Loss|\n",[38,438,436],{"__ignoreMap":40},[10,440,441],{},"Note what the formula ignores: how long the account traded, how much capital it used, and how deep it fell along the way.",[10,443,444],{},"It can also be written in terms of win rate and average trade size, which is where it becomes diagnostic:",[31,446,449],{"className":447,"code":448,"language":36},[34],"Profit Factor = (Win Rate × Avg Win) \u002F ((1 − Win Rate) × Avg Loss)\n",[38,450,448],{"__ignoreMap":40},[10,452,453],{},"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.",[455,456,457,470],"table",{},[458,459,460],"thead",{},[461,462,463,467],"tr",{},[464,465,466],"th",{},"Profit factor",[464,468,469],{},"Reading",[471,472,473,482,490,498,506,514],"tbody",{},[461,474,475,479],{},[476,477,478],"td",{},"Below 1.00",[476,480,481],{},"Loses money — structurally, not marginally",[461,483,484,487],{},[476,485,486],{},"1.00 – 1.10",[476,488,489],{},"Inside the noise. One bad week erases it",[461,491,492,495],{},[476,493,494],{},"1.10 – 1.30",[476,496,497],{},"Thin but real edge, if the sample is large",[461,499,500,503],{},[476,501,502],{},"1.30 – 2.00",[476,504,505],{},"A working strategy",[461,507,508,511],{},[476,509,510],{},"2.00 – 3.00",[476,512,513],{},"Strong. Check trade count and cost accounting",[461,515,516,519],{},[476,517,518],{},"Above 3.00",[476,520,521],{},"Rare on long histories: usually a short sample, a few outsized winners, or open losers not yet realised",[14,523,55],{"id":54},[10,525,526],{},"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.",[10,528,529,530,534],{},"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 ",[22,531,533],{"href":532},"\u002Fglossary\u002Fwhat-is-maximum-drawdown","maximum drawdown",", or you are measuring the destination without the trip.",[10,536,537,538,540],{},"The same caution applies to a profit factor quoted from a ",[22,539,374],{"href":373},": optimisers maximise exactly this ratio, so a high backtested value often measures the fitting process rather than the strategy.",[14,542,70],{"id":69},[10,544,545,546,549,550,557],{},"The figures below describe accounts published on ShowMyTrades, not traders in general. Across the published accounts that have trading history (August 2026), the ",[75,547,548],{},"median profit factor is 1.28"," and the ",[75,551,552,556],{},[22,553,555],{"href":554},"\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.",[10,559,560],{},[561,562],"img",{"alt":563,"src":564},"Medians across public ShowMyTrades accounts: a 68.8% win rate beside a 1.28 profit factor","\u002Fimages\u002Farticles\u002Fwin-rate-vs-payoff.svg",[10,566,567],{},[568,569,570],"em",{},"Two medians from the same set: the win rate looks strong, the edge behind it is thin.",[10,572,573,574,577],{},"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 ",[75,575,576],{},"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.",[10,579,580,581,583,584,587],{},"The median Sharpe ratio on the same set is ",[75,582,103],{},", and the median account has ",[75,585,586],{},"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.",[14,589,118],{"id":117},[10,591,592,595,596,599,600,129,602,129,604,129,606,129,608,133,610,613],{},[75,593,594],{},"Profit Factor"," sits in the ",[75,597,598],{},"Advanced Statistics"," module on every published account page, alongside the numbers that explain it: ",[75,601,124],{},[75,603,128],{},[75,605,132],{},[75,607,136],{},[75,609,342],{},[75,611,612],{},"Sharpe Ratio",". The six together say what the single ratio cannot.",[10,615,616,617,620,621,133,624,627,628,133,630,633,634,638],{},"Two product details matter. First, the costs already inside the ratio are itemised separately: the trades table carries ",[75,618,619],{},"Profit (Gross)"," with ",[75,622,623],{},"Swap",[75,625,626],{},"Commission"," as their own columns, and Advanced Statistics totals ",[75,629,347],{},[75,631,632],{},"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, ",[22,635,636],{"href":323},[75,637,168],{}," 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.",[14,640,177],{"id":176},[179,642,643,652,662,668],{},[182,644,645,648,649,104],{},[75,646,647],{},"\"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 ",[22,650,651],{"href":296},"once commission and swap are applied",[182,653,654,657,658,661],{},[75,655,656],{},"\"A high profit factor means low risk.\""," It says nothing about drawdown, position size or sequence. A martingale ",[22,659,660],{"href":49},"position-sizing"," progression can post 4.00 right up to the day it does not.",[182,663,664,667],{},[75,665,666],{},"\"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.",[182,669,670,673],{},[75,671,672],{},"\"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.",[10,675,676,677,104],{},"For which metrics to track over time and in what order, see ",[22,678,679],{"href":404},"the guide to tracking trading performance",{"title":40,"searchDepth":214,"depth":214,"links":681},[682,683,684,685,686],{"id":16,"depth":214,"text":17},{"id":54,"depth":214,"text":55},{"id":69,"depth":214,"text":70},{"id":117,"depth":214,"text":118},{"id":176,"depth":214,"text":177},"Metrics","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,{},[231,692,693,417],"what-is-maximum-drawdown","what-is-position-sizing",{"title":425,"description":688},"5.glossary\u002Fwhat-is-a-profit-factor","0loLRuqRU0mx9nEOfjdEFW6U1Fb_JAC1jN2JQSkIjuE",{"id":698,"title":699,"body":700,"category":687,"date":222,"description":890,"draft":689,"extension":225,"meta":891,"navigation":224,"path":64,"related":892,"seo":894,"stem":895,"term":157,"updated":222,"__hash__":896},"glossary\u002F5.glossary\u002Fwhat-is-drawdown.md","What Is Drawdown? Definition, Formula and Real Numbers",{"type":7,"value":701,"toc":883},[702,705,707,710,716,719,722,754,756,759,765,770,773,783,785,791,806,809,811,832,847,849,878],[10,703,704],{},"Drawdown is the decline in an account's value from a previous peak down to a subsequent low, expressed as a percentage of that peak. It measures how far the account fell from its own best point, not how much it lost on any single trade. Because it accumulates, a 20% drawdown can be built out of forty small losses just as easily as out of one disaster.",[14,706,17],{"id":16},[10,708,709],{},"Every account carries a running high-water mark: the highest value it has ever reached. Drawdown is the distance below that mark at any given moment.",[31,711,714],{"className":712,"code":713,"language":36},[34],"Drawdown % = (Peak value − Current value) \u002F Peak value × 100\n",[38,715,713],{"__ignoreMap":40},[10,717,718],{},"The mark only moves up. When a new high is printed, the high-water mark resets to it and drawdown returns to zero. Until then, every day below the peak is a day in drawdown, whether the account is falling or grinding sideways.",[10,720,721],{},"Three distinctions decide what the number actually means:",[179,723,724,734,740],{},[182,725,726,729,730,733],{},[75,727,728],{},"Relative vs absolute."," Relative drawdown is the percentage above. Absolute drawdown, as MetaTrader reports it, is the fall below the ",[568,731,732],{},"initial deposit"," in currency — a completely different figure that can read 0% on an account currently 40% below its peak.",[182,735,736,739],{},[75,737,738],{},"Equity vs balance."," Equity drawdown counts floating losses on open positions. Balance drawdown counts only closed trades, so a loss that is never realised never appears in it.",[182,741,742,745,746,748,749,753],{},[75,743,744],{},"Current vs maximum."," Current drawdown is where the account sits today. The historical worst is ",[22,747,533],{"href":532},", and it is the figure most ",[22,750,752],{"href":751},"\u002Fglossary\u002Fwhat-is-a-track-record","track records"," quote.",[14,755,55],{"id":54},[10,757,758],{},"Drawdown is the constraint that decides whether a strategy is investable, because losses and gains do not compound symmetrically. A 20% fall needs a 25% gain to get back to even. A 50% fall needs 100%.",[10,760,761],{},[561,762],{"alt":763,"src":764},"A 10% loss needs an 11.1% gain to undo it, 25% needs 33.3%, 50% needs 100%, 70% needs 233%","\u002Fimages\u002Farticles\u002Frecovery-asymmetry.svg",[10,766,767],{},[568,768,769],{},"Past 50%, the recovery is a bigger job than the loss that caused it.",[10,771,772],{},"It is also the number that removes people from the market. Almost nobody quits during a fast, violent fall — the emotion there is hope. They quit in month nine of a flat recovery. Depth is only half of it; duration is the other half, and it is invisible on a returns chart.",[10,774,775,776,133,778,782],{},"And drawdown is the direct output of ",[22,777,50],{"href":49},[22,779,781],{"href":780},"\u002Fglossary\u002Fwhat-is-a-stop-loss","stop-loss"," discipline, far more than of entry quality. Two traders with identical signals and different lot sizes produce identical win rates and completely different survivability.",[14,784,70],{"id":69},[10,786,787,788,104],{},"The figures below describe accounts published on ShowMyTrades. They are not a survey of traders in general. Across the published accounts that have trading history (August 2026), drawn from 15,436,464 synchronised trades, the median deepest drawdown ever reached is ",[75,789,790],{},"9.7%",[10,792,793,794,83,798,801,802,805],{},"Set that against what the same accounts earned. The median ",[22,795,797],{"href":796},"\u002Fglossary\u002Fwhat-is-time-weighted-return","time-weighted return",[75,799,800],{},"+3.2%",", and ",[75,803,804],{},"63.0%"," of them are positive over time. The middle account here therefore gave up roughly three times its eventual return in peak-to-trough decline along the way: the risk absorbed is larger than the result, and larger by a multiple rather than a margin.",[10,807,808],{},"That ratio, not the raw depth, is what makes a drawdown figure readable. A published claim of large gains beside a two- or three-percent drawdown is not impossible, but it sits at the outer edge of this distribution, and the rest of the account page is where an edge case has to be justified.",[14,810,118],{"id":117},[10,812,813,814,817,818,821,822,824,825,831],{},"On every published account page, the ",[75,815,816],{},"Account Stats"," panel carries two figures on consecutive rows, immediately below ",[75,819,820],{},"Avg Monthly %",": ",[75,823,157],{},", measured on equity so floating losses on open positions are included, and ",[75,826,827],{},[22,828,830],{"href":829},"\u002Fglossary\u002Fwhat-is-drawdown-on-balance","DD on Balance",", measured on closed results only. Both are historical maxima rather than today's reading, and both come from the broker feed rather than from the account owner.",[10,833,834,835,837,838,841,842,846],{},"The charts module has a ",[75,836,157],{}," view that plots daily drawdown as bars over the life of the account. That is where the ",[568,839,840],{},"duration"," of a decline becomes readable instead of inferred, which no single headline percentage can convey. The ",[22,843,845],{"href":844},"\u002Ftools\u002Fdrawdown-calculator","drawdown calculator"," runs the recovery arithmetic on your own balance.",[14,848,177],{"id":176},[179,850,851,857,863,872],{},[182,852,853,856],{},[75,854,855],{},"\"Drawdown is my biggest losing trade.\""," It is not. It is a cumulative peak-to-trough path that can contain hundreds of trades, including winners.",[182,858,859,862],{},[75,860,861],{},"\"My drawdown went back to zero after I recovered.\""," Current drawdown did. Maximum drawdown never falls, by design — it stops a good quarter from erasing a bad one.",[182,864,865,868,869,104],{},[75,866,867],{},"\"Low drawdown means low risk.\""," On a young account it usually means untested. The median published account here has 171 closed trades; below a few hundred, ",[22,870,871],{"href":113},"a small drawdown is a sample size, not a risk profile",[182,873,874,877],{},[75,875,876],{},"\"Balance drawdown is the real one.\""," It is the flattering one. Grid and averaging-down systems keep balance drawdown small precisely by refusing to close losers.",[10,879,880,881,104],{},"For how drawdown reads alongside every other number on an account page, see ",[22,882,212],{"href":211},{"title":40,"searchDepth":214,"depth":214,"links":884},[885,886,887,888,889],{"id":16,"depth":214,"text":17},{"id":54,"depth":214,"text":55},{"id":69,"depth":214,"text":70},{"id":117,"depth":214,"text":118},{"id":176,"depth":214,"text":177},"Drawdown is the peak-to-trough fall in an account's value, in percent. Here is the formula, why it is cumulative, and what thousands of real trading accounts show.",{},[692,693,893,230],"what-is-a-stop-loss",{"title":699,"description":890},"5.glossary\u002Fwhat-is-drawdown","DMQq_wxULyvtTewFH3EendlyxckASOfp4LLweDXbTKY",1787415692929]