Balance-Based vs Equity-Based Drawdown

Balance-Based vs Equity-Based Drawdown

Two common drawdown calculation methods with different implications for your trading.

Balance-Based Drawdown

Calculates drawdown based on your starting balance, regardless of profits.

Equity-Based Drawdown

Calculates drawdown based on your current account equity (balance + profits).

Which is Better?

Analysis of which method provides better protection and flexibility for traders.