Not withstanding anything that has been said, the Capital Required is a drawdown that should be expected at some point, statistically speaking. So if you only want to risk a 20% drawdown, then the Capital Required should be 20% of your account.
Hm, you're right. I had totally wrong perception of that value this whole time. But if 'Capital' is not what I thought it was, then of course my whole calculation makes no sense.
I'm afraid I get bitten way too often with terminology and concepts behind Z strategies money management. Partly because I'm afraid of it, partly because it *is* complex stuff. And mostly because I still haven't done my homework.
Let me try again then. With 100/20 settings, if the capital, actually, the expected max drawdown is around $8000, and if I tend not to tolerate drawdown bigger than 20%, that would mean I need to start with $8000 * (100% / 20%) = $40000. Am I right so far? That's not far from starting 50000, then.
So I could actually modify it a little bit and say that I started with $50000 not because FXCM didn't give me another option, but because I decided I would not like more than 15.8% drawdown.
If we agree with the above, Z12 is only 7.5% in drawdown, just as myfxbook reports. That's not bad. Now I only have trouble calculating what was my target profit? Is it 324% annualy as backtest reports? I doubt it. Or is it now 324 * (50000/7921) = 51%? I must ask because I need to compare the current drawdown with expected return to get to any meaningful conclusion about the strategy performance.
