Would I be right in saying that a "maximum drawdown" is the biggest drop from the highest point of the bank?

Ie if your bank grows from 100 to 25,000 then goes down to 12,000, is the maximum drawdown $13,000?

Also, do you express it as a %? (In this case, 52% of bank was lost from maximum down to 12,000).

If this is all true, then over an extended period, what's the maximum drawdown you want to be able to endure? For example, the system I am currently testing in another thread has, over a 2 year period, a 58% maximum drawdown. This is over 6000 bets, using 1% of bank as the bet size.

Would this be considered "acceptable"?

If I remember rightly jfc put a maximum drawdown calculator on a site for us somewhere last time we discussed this.

The answers to all your questions are "It depends" (except the first one which is "yes").
In your case representing your maximum drawdown as a percentage seems pretty sensible because your bet size is a proportion of your bank so your drawdown and your bets are in the same "units". Although, if you're reducing the size of your bets as your bank shrinks who cares what the maximum drawdown is - you should be able to take a huge drawdown without exhausting your bank - until you get to the minimum bet size of your bookie. Of course, building it up again is going to take ages with the teeny weeny bets that your miniscule bank allows (not a fan of reducing bet systems myself).
I tend to increase my bet size in the (unlikely) event that my bank passes a certain size and then don't reduce the bet size. I suppose logic would suggest my my maximum drawdown should then be expressed as a number of bets. The logic being that if my bet size is 1/200th of my bank non reducing I can take a maximum loss of 200 units.
As for whether your 58% is acceptable, using jfc's drawdown calculator you will find that maximum drawdown increases (not surprisingly) with the number of bets you make. If you have lost 58% in two years of betting - how long do you expect to use this system? I'm guessing if you use it for 10 years you will probably experience a largest losing streak of at least twice as big as the one you've had in two years.
So the decision my friend is yours. Grasp the nettle with both hands, follow the piper into the cave and stop prevaricating. You only live twice - or so it seems.
KV

Hi Duritz!
Each way bet here. Depends????
I start counting (incrementing) the draw down when I go into the negative, that is after I have lost the bank and going on losing. At the first win the drawdown reverts to zero but the amount is kept in memory or file and if a bigger comes along it will replace it as the max DD.
I find it pointless to regard the losing runs as drawdown, after all draw_down means drawing on your own resources, and depends how much you can afford to lose before pulling the plug, not on winnings.
But each to his own here.

I find your largest drawdown strange Iomaca. When I lose the bank it's curtains. Your system sounds like the path to ruin and pressing the button at the bottom of tab home pages which says "Gambling problems". But I defend to the death your right to mean what you like when you say drawdown.

Apologies to Duritz for my use of the word prevaricating instead of procrastinating. It's the sort of mistake any idiot could make when 3 sheets to the wind and carrying on a conversation while typing.

KV

Where did I say I was losing the bank Kenny?
I was merely speaking theoretically, ie if I am running a programme of "what if"
and if losing the starting capital midway the run, that does not mean I am losing overall, the capital could have been as little $20. I have to rephrase that, the capital is always zero when I run a what if programme!!!!
Ease up man, you seem to be too tense lately!

Thanks for that guys, just used that drawdown calculator, but in what is that being expressed, are the units betting units, so if it comes up with a drawdown of 116 units, does that mean 116*whatever your bet unit is?

IE - if your bet size is flat stake $1 no matter what your bank size, does that mean the maximum DD from the peak is $116?

KV, prevaricate - no-one ever does that here!?!

As to procrastinating.... well I've taken the bull by the horns, am punting the sys, just at the same time trying to work out what kind of run I am in for.

Interestingly, if on the two years results of this method you bet 2% of a bank rather than 1%, the max drawdown goes to 84%, which for mine is too high.

I'll run it through flat stakes and see what the "actual" max drawdown is, in units.

Here is how to do a draw-down chart:

Get some graph paper [or get one up on your puter]. In the middle of the paper [horizontal perspective] draw a 'mean' line across the page in the middle. Mark on the top of page 12 points [dots] across it evenly spaced representing months. Name the months above the dots.

The mean line represents $0 result which might be for a starting $5000 bank for instance. Each printed graph line above or below the drawn 'mean' line represents a unit of value depending on your average bet size, the horizontal graph lines might represent $10,20.50.100 etc.

At the end of the first month if you are in say $500 profit and your horizontal graph lines represent say $20, count up 25 lines and on the vertical line that represents the first month mark with a dot. Draw a line from that dot back to the start of your 'mean' line. Keep doing that, joining the dots every month [can do one for weeks if you like]. After 12 months the lowest point reached below the 'mean' line is your max. draw-down for 12 months.

The above is for a profit and loss draw-down chart. Naturally you can do them to represent almost anything [how many pots you drink a month even].

Just change the values involved to suit your needs. It might be a SR draw-down chart for instance which will let you know SR max-drawdown [max run of outs] in 12 months. Just give everything values and away you go !!