The same trade total can hide a different drawdown path
Adding a set of cash outcomes produces the same total regardless of order.
A total ignores sequence
Adding a set of cash outcomes produces the same total regardless of order. Drawdown follows a path, so changing the order can change the largest decline from a previous peak. Preserve chronological order when reviewing drawdown; sorting trades by profit can destroy the property you are trying to measure.
Both invented sequences end at zero cumulative P&L. The shaded gap between the grouped path and its running peak reaches 200; the alternating path’s maximum decline is 100. This is closed-result cash drawdown.
Open full-size diagram ↗Compare two invented paths
Use outcomes +100, +100, −100, −100, starting cumulative P&L at zero. The path is 100, 200, 100, zero, with a largest cash decline of 200. Reorder the same outcomes as +100, −100, +100, −100. The path becomes 100, zero, 100, zero, with a largest decline of 100. Both totals are zero. The diagrams compare cumulative P&L, not account equity or percentage drawdown.
Worked example: Grouped-loss drawdown: 200; Alternating drawdown: 100. Invented values; units follow the row labels and article.
Open full-size diagram ↗Include the starting reference
A peak calculation should include the appropriate starting reference, not begin only after the first profitable observation. Specify whether the series contains closed-trade results, daily marked equity or another measure. Open-position losses can be absent from a closed-trade path, making it unsuitable as a complete account-risk description.
Calculation checklist: Both totals: 0; Grouped path peak: 200; Measure: Closed-result cash drawdown. Preserve these definitions when reproducing the example.
Open full-size diagram ↗Keep sorting separate from analysis
Use a display sort for browsing if needed, but calculate sequence-dependent statistics from a stable time order. If several records share a timestamp, document the tie-breaking rule. SanForex’s journal cash drawdown reflects its entered record sequence; it should not be presented as verified intraday equity drawdown.
Sources and conventions
Examples are hypothetical. Worked examples state their formulas and assumptions in the article; our methodology explains the related calculators. Broker contract specifications determine actual lot, margin and execution conditions. These sources document definitions and data; a source link does not imply endorsement of SanForex or a trading service.
These materials are prepared with AI assistance and checked against worked examples and deterministic calculation tests where applicable. They are not an expert suitability assessment or investment advice.
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