Forex Drawdown Calculator
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Use our precise forex drawdown calculator to help you calculate accurately how your trading account equity can be affected after a series of losing trades.
What is Drawdown in Forex
In forex, drawdown refers to the reduction of the account’s capital due to a series of losing trades. It is calculated on the deviation between the highest point and the subsequent low point of the trading account’s balance. There are two types of drawdown, absolute and relative drawdown.
Absolute drawdown refers to the deviation between the initial capital risked and the minimal account’s balance below that level.
Maximum drawdown is the highest deviation between the account’s balance highest equity level and the next lowest equity level. Maximal drawdown is calculated in currency values.
Relative drawdown is the drawdown percentage reflecting the deviation between the account’s balance highest equity level and the next lowest equity level. Relative drawdown is calculated in percentage values.
A forex drawdown calculator is considered one of the most important account risk tools for professional traders. Using a drawdown calculator can help traders avoiding reaching an intolerable drawdown percentage that could put the account’s balance at risk of complete loss.
With this drawdown calculator traders can simulate what should be the ideal percentage of equity to risk per trade.
How to Use the Drawdown Calculator
This drawdown calculator is useful to accurately simulate how much money will be erased from the trading account after a series of losing trades at a set risk percentage. Let's see how to use our calculator, field by field.
Starting balance: This field represents the initial account equity. For our example we will use a starting balance of 2,000 units of any account base currency.
Consecutive loses: This field represents a strike of losing trades, that will impact the final account’s balance. For our example, we will use, a series of 8 consecutive losing trades.
Loss % per trade: This field represents the risk % per lost trade. Following the rule of thumb that professional traders do not risk more than 2% of the account equity per trade, we will also use a loss of 2% per trade, for our example’s calculations.
And now, to find out how much we will lose from out account balance, we hit the red "Calculate" button.
The results: The drawdown calculator will display the "The Ending Balance" after losing 8 consecutive trades and the "Total Loss" percentage.
In our example, an initial equity of 2,000 units of any currency, after 8 consecutive loses, is now 1,701.53 units.
In other words, even with 8 consecutive losing trades, which is quite regular in FX trading, and by risking a conservative, and recommended, 2% account equity per trade, our total loss was just 14.9%.
The calculator also displays a detailed breakdown of how much each lost trade will affect the account balance, by calculating the updated account balance, the total loss percentage and the ending account balance.
Add this Forex Drawdown Calculator to Your Website
Our set of calculators use live market rates, allowing traders to get the most accurate calculations possible. These calculators work with the most popular cryptocurrencies: BTC, DOGE, XRP, LTC, ETH and many more, most forex pairs (Major and Minor crosses), world indices and metals.
Not only it is possible to calculate with precision what would be the capital percentage loss for a BTC/USD losing trade, based on the selected risk percentage per trade, or for a 0.50 lot GBP/USD trade, for example, but also, these great calculators are localised in 23 different languages, including Chinese, Russian, Arabic, and Japanese.
With a user-friendly interface and an intuitive design, these tools can be easily customized and embedded with any web page. The great advantage of our tools is that they are completely unbranded, without any 3rd party logos. Plus, these tools can be fully customized to match the colour scheme and the layout of any web page.
If you consider that this complete suite of calculators might create added value for your web pages, or to simply complement a "Tools/Calculators" section of your portal, you are free to embed them on your website.
All the widgets can be used and embedded as they are, or they can be fully customized to suit your website’s colours. After configuring the settings, simply copy/paste the final code to embed the tool/calculator widget on your web page.