Max DD in Streak

General
1

Can someone please explain the concept of MaxDD, is it like alpha or deviation? or something else?

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2 Likes
2

Max Drawdown (MaxDD) is simply the biggest drop your strategy or portfolio has seen from its highest point before recovering. For example, if your capital grows from ₹1 lakh to ₹1.5 lakh and then falls to ₹1.2 lakh before going up again, the drawdown is 20%, and if that’s the largest fall ever, the MaxDD is 20%.

3

MAX DD shows how much your strategy fell, at its worst point, from its highest value during the backtest.

MAX DD = (Peak − Trough) / Peak

4

thanks

5

thanks got it