Nice post by xray about drawdowns
A broad definition of drawdown could be the largest loss or the largest losing streak of a trading system, whichever is the biggest
In fact it is important to distinguish between three different types of drawdown:
1. An end trade drawdown tells us how much of the open profit we had to give back before we were allowed to exit a specific trade
2. A close trade drawdown is the difference between the entry and the exit price without taking into consideration what is going on within the trade
3. A start trade drawdown measures how much the trade went against us after the entry and before it started to go our way.
Source:Trading systems by Emilio Tomasini & Urban Jaekle
Seen excellent improvement in ISL after following above points
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