Calculating max DD

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  • #79607
    Nelson Brady
    Participant

    Looking at the US Market 2X Leveraged portfolio 1 year plot I see it up 38% on 3/6 and drops to up 2% on 3/19. Why is that not viewed as a 36% drawdown?

    #79623
    Patrick
    Keymaster

    It is because they are using different starting points. If a stock goes from 100 to 150 it has a 50% return (+50/100). If it goes back to 100 from 150, it has a 33% drawdown (-50/150).

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