jcl, I get what you're saying.

When you run a test on Zorro it gives you the $DD as the biggest $ drop. So when you're running the same system live, you can expect the same absolute $ drop, regardless of starting capital or balance. % doesn't matter.

So, for example, I'm running Z12 on $50K demo account with Margin = 100, Risk = 25. The test results show:

Max drawdown -5148$ 9% (MAE -6948$ 12%)
Capital required 8017$

But capital, as we know, is irrelevant to the equation. What matters is that so far my demo has had an actual DD$ of -3386, which is still well within the historically largest DD. So I can consider the system to be performing within its expectations.

This also explains you're approach of trading a system with Zorro's stated minimum CR and considering it expired when the capital is gone. Makes sense to me.

I think it's simply a question of analytics. That is, myfxbook shows DD as % drop in balance. It doesn't show absolute DD$, I had to calculate it from peak balance to equity valley using a calculator (no big deal, but extra steps for the lazy haha). (BTW, I didn't see where mxfxbook shows DD as % of profits.)

It would be a helpful addition to Zorro to also have DD as % of balance, which necessarily has to include starting capital into the equation. That is:

Let's take your example of the first trade winning $10 and the second trade losing $20, but with a starting capital of $100. Your balance after the first trade is $110 and after the second trade, $90, giving you a max DD of 18% ($20/$110), not 200%.

This 18% calculation isn't actually necessary for understanding the expected DD, as we saw above, but for easy comparison to analytical tools such as myfxbook it would be helpful.

By the same token, it would be helpful to have, for example, a starting capital slider for the Z systems so as not to have to do successive tests with different margin settings.

It's just a matter of looking at the same thing from different angles.

(BTW, for sake of comparison, let's look at the above example with DD as % of profits. Again, we start with $100 and the first trade wins $10 and the second losses $20, and all subsequent trades are winners. For convenience's sake let's say there are 98 subsequent winning trades, all winning $10. This gives us a final profit of $970 (99 winners - 1 loser = (99 x $10) - (1 x $20) = $970) and a drawdown of 2% ($20/$970). It's this figure that's misleading to people I think.)