There are 3 different scenarios when you should look at maximum drawdown: Then calculate the running profit/loss in percent.įinally, use the MIN function in Excel to find the biggest drawdown in the running total. Simply add all of the trades in the portfolio to the spreadsheet.Īfter that, sort all of the trades by exit date. The process of calculating max drawdown for a portfolio is the same. How do You Find Max Drawdown of a Portfolio? Simply highlight row T (or your running percent change total column), then click the graph button to create a graph on the side of the table.Įven if you don't have a new high watermark in your account balance, but your current drawdown is bigger than previous drawdowns, you can consider your current drawdown your max drawdown. The formula in this example is:įinally, you can also create a graph of your drawdown, so it's easier to visualize. Once you have this running total in percent, you can use the MIN function to find the smallest (most negative) number in this column to get the max drawdown.
Then add the percent profit or loss in the next column to create a running total. Since max drawdown should be calculated in percent, we have to figure out the percent change on each trade. In the next column, create a percent profit or loss for each trade. Next, create a column called Balance and add the profit from each trade to the running balance. You can learn more about Forex Tester here. I'll be using an export from Forex Tester to analyze my backtesting results. You can use similar formulas in spreadsheet programs like:įirst import your trades into Excel. This is the exact process for calculating max drawdown in Excel. ? Step-By-Step Guide to Calculating Maximum Trading Drawdown in Excel
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