The words people use.....

[FTSE in mouth]

Hi all

Just a couple of questions about the meanings of words used on this site and in the industry.

Lets see if I have this straight.....

maximum drawdown: The maximum amount of cash you can lose on a certain play?

What exactly is slippage?

TIA

Pete

 

[alexander]

Hi all

Just a couple of questions about the meanings of words used on this site and in the industry.

Lets see if I have this straight.....

maximum drawdown: The maximum amount of cash you can lose on a certain play?

What exactly is slippage?

TIA

Pete

Maximum drawdown: the maximum drop in account equity value, estimated either intraday or at the close (max intra drawdown and max closed drawdown)

Slippage: the difference (in points, ticks or pips, etc. ) between the price at which you intended to open or close a position and the price you actually did that.

The first indicates how smooth is your equity curve and the second is a random factor that can affect the reliability of back testing results and actual trading.

Alexander

 

[Racer]

You might find this useful:
Hypertextual Finance Glossary
Over 8,000 Entries and 18,000 Hyperlinks

http://www.duke.edu/~charvey/Classes/wpg/glossary.htm

 

[FTSE in mouth]

Thanks guys!