KEY TRADING PERFORMANCE METRICS

Maximum drawdown

Assessing trading performance is an effective way to improve your trading system and get more profits. Read about the profit factor, one of the key performance metrics to rely on. Assess, improve and achieve your trading goals!

In this article we continue discussing key trading performance metrics that contribute to your trading strategy all-round assessment, resulting in crucial improvements and constantly increasing profitability.

What is essential to remind you from the previous article is that there are two pillars of successful progressive trading that are:

Precise recording of trading statistics (manually and/or automatically),
Calculation of additional trading performance metrics.
By completing these actions, you get an idea of your trading performance and a comprehensive picture of its efficiency via key trading metrics that provide you with valuable insights of your strengths and weaknesses. Among these metrics, there are profit factor (discussed in a previous article), maximum drawdown, total, and average net profit, etc. In this article, we are covering the maximum drawdown, one of the most essential risk assessment indicators.

Maximum drawdown (MDD) is a metric that means a peak-to-trough decline of your deposit (before a new high is reached) during a particular period of time. Simply, the maximum losses you suffered.

Read more:
https://www.bitinsure.com/blog/key-trading-performance-metrics-maximum-drawdown/