**2. How to calculate the Floating Drawdown**

**3. Floating Drawdown Chart on FXCE**

**1. What is floating drawdown**

Floating drawdown which is also known as floating losses happens when the account equity becomes negative.

For more details, let's take a look at how it is calculated as well as a chart showing the floating drawdown from time to time and the Maximum Floating Drawdown in sections 2 and 3 of this article.

*(The FXCE account overview shows the maximum drawdown)*

**2. How to calculate the Floating Drawdown**

**a. How to calculate the Floating Drawdown at each time (c) and the maximum (d)**

- Current Floating
**(a) = min (balance,equity)** - Max Previous Floating
**(b0)** - Max Floating
**(b) = max (a,b0)** **Current Floating Drawdown (c) = (b-a)/b**- Max Previous Floating Drawdown
**(d0)** **Max Floating Drawdown (d) = max(c, d0)**

**b. Example**

**Initial account: Balance=1000; Equity=1000; Floating Drawdown=0%**

**After, the account changed: Balance=1000; Equity=800; Max Floating Drawdown=20%**

**3. Floating Drawdown Chart on FXCE**

To view the volatility of the Floating Drawdown, the user needs:

- View the volatility of balance and equity through Balance - Equity chart
- View the volatility of Floating drawdown through the Floating drawdown chart

**Note:*** To view only the Floating Drawdown line, click off the Balance Drawdown line and the Equity Drawdown line.*

**a. From time to time (c)**

We can see in this account:

*At 7:16 on January 21, 2021: Initial balance is $10,000; Initial equity is $10,000.*

*Floating drawdown is 0%*

*At 9:41 on January 21, 2021: The balance drops to $9,999.3. The equity drops to $9,998.9.*

We have: a=9,998.9; b=10,000; c=(10,000-9,998.9)/10000*100=0.01%

*Floating drawdown is 0.01%*

**b. The maximum floating drawdown (d)**

**Step 1: Find "a" (Current floating) at the maximum floating drawdown**

View the floating drawdown chart overview, we can see that 7.46% is the maximum floating drawdown represented at the highest point in the red frame as shown below. (Click and drag if you want to enlarge the chart for detail and accuracy).

The equity is $9,966.78; The balance is $9984,68.

**a= min(9,966.78; 9984,68)= 9,966.78**

**Step 2: Find the highest value of the previous Min(Balance, Equity) points (b0)**

In the Balance - Equity Chart:

We can zoom in on the chart for the period from 10:07 Feb 09, 2021 back to the initial trading time.

Move the mouse to find the point with the highest value of the Min (Balance, Equity) points.

**The value of b0 found is $10,769**

**c= (10,769-9,966.78)/10,769=7.46 %**

**The Maximum floating drawdown is 7.46%**

**Note:** Withdraw/Deposit has no effect on the Floating Drawdown.

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