My understanding is that "Capital required" in the performance report comes from the historical "worst case scenario" that would have occurred, had you been trading during the backtest period. Here is what the manual says:
Sum of normalized drawdown and maximum margin. This is the initial capital required when trading is started at the worst possible historical moment, i.e. directly at the balance peak preceding the largest drawdown (see remarks).
...
Drawdown dependent performance figures such as Annual return and Capital required are calculated from a normalized drawdown, which is the maximum drawdown normalized to 36 months. This normally generates performance figures that are largely independent on the test period.
Do you think it's safe to assume that a trader could start with the minimum "capital required" safely, based on the unlikelihood of that "worst case" being exceeded? I'm asking only to understand your line of thinking -- because I had previously assumed that figure was a bare minimum that we should exceed in real trading. However, for nanolot trading "it sure would be nice" to follow that figure religiously as a rule-of-thumb.
Also, what do you mean by the phrase "maximum drawdown normalized to 36 months"? Where does the 36 months come from? Are you saying that in a 10-year backtest, you are only looking at the max drawdown of any consecutive 36-month period? I just want to understand.
THANKS
