Closed Trade vs Intraday Drawdown and Why Equity Curves Can Mislead

A closed-trade drawdown measures the decline in a balance reconstructed from completed trades. Intraday equity drawdown can also capture losses while positions remain open. The difference matters when a strategy finishes trades profitably after substantial adverse moves.

For NQ and MNQ traders reviewing a systematic TradingView strategy, a smooth line is only the beginning. You need to know what the line records, how its peaks are defined, and which price movements the report can observe.

What closed trade drawdown measures

Start with a reporting balance equal to initial capital plus cumulative realized trading profit or loss, with costs included consistently. Record that balance after every completed trade. Closed-trade drawdown is the decline from its previous high; maximum closed-trade drawdown is the largest such decline in the sample.

This is a reconstructed strategy statistic, rather than a description of every broker accounting entry. Assume no deposits or withdrawals, or adjust for them before interpreting trading performance.

A strategy can close every trade at a profit and have zero closed-trade drawdown while still experiencing substantial open losses. A list of entry and exit fills alone cannot establish how deep those losses became.

TradingView describes its Performance chart’s cumulative PnL line as tracking completed trades. Its optional trade-excursion layers add information about movements during those trades. Check which layers are visible before judging a screenshot. TradingView Performance chart

What intraday equity drawdown adds

For the simplified reporting model here, equity equals the realized-trade balance plus unrealized profit or loss on open positions. A continuously sampled equity drawdown compares that total with its previous equity high, including unrealized gains.

“Intraday” describes observations within a trading day. “Intrabar” describes observations within a chart bar. The terms do not guarantee identical calculations. A five-minute equity series can miss a temporary trough inside a five-minute bar; an end-of-day series can miss an entire intraday decline.

Two reports may also choose different reference peaks. One may track every unrealized equity high, while another starts from a high established by completed trades. Read the formula alongside the label.

A worked MNQ example

Consider a hypothetical strategy starting with $10,000. It holds one position at a time and trades two MNQ contracts. Exclude commissions and slippage temporarily to isolate the calculation.

MNQ has a $2 value per index point per contract. Its minimum tick is 0.25 points, or $0.50 per contract. CME MNQ contract overview

The completed trades are:

• Trade 1 earns $200, taking the balance to $10,200

• Trade 2 loses $100, taking it to $10,100

• Trade 3 earns $100, returning it to $10,200

The largest decline between completed trades is $100. Relative to the $10,200 peak, that is approximately 0.98%.

Now look inside Trade 3. The strategy buys two MNQ at 20,000. Price falls to 19,925 before recovering, and the position closes at 20,025.

At the low, the open loss is:

75 points × $2 per point × 2 contracts = $300

Equity falls to $10,100 − $300 = $9,800. Assume there were no earlier equity highs above $10,200 and no other declines larger than this one. The maximum equity drawdown is therefore:

$10,200 − $9,800 = $400, or approximately 3.92% of the peak

Trade 3 ultimately earns 25 × $2 × 2 = $100. Its profitable exit does not erase the $300 open loss or the $400 strategy-level drawdown experienced earlier.

The same $400 is 4% of the initial $10,000. Both percentages are arithmetically valid, but they use different denominators. Every report should identify which denominator it uses.

Maximum adverse excursion answers a different question

Maximum adverse excursion, or MAE, measures the worst movement against an individual trade from its entry while it remains open. TradingView’s trade-level adverse-excursion example compares entry with the lowest price reached during a long trade. TradingView adverse excursion

In our example, Trade 3 has a $300 MAE before costs. Strategy equity drawdown reaches $400 because the account was already $100 below its previous peak when that trade began.

MAE helps examine entries, stops, and individual trade behavior. Strategy drawdown measures the cumulative path across trades. For overlapping positions, portfolio equity also depends on when their profits and losses occur; adding each trade’s separate worst excursion can combine events that never happened together.

How TradingView defines its intrabar metric

TradingView’s documented Max drawdown intrabar calculation examines bars while a position is open. Its reference maximum uses initial capital and equity values from trades closed before the current trade opened. It combines the existing decline from that reference with adverse movement in the current position. TradingView Max drawdown intrabar

That reference is important. The documented metric is not automatically equivalent to a continuously sampled high-water mark that advances whenever an open position makes a new unrealized profit. Our simplified example avoids that difference by placing the relevant peak at a completed trade.

Historical order fills also depend on simulation assumptions. TradingView’s broker emulator ordinarily infers within-bar movement from open, high, low and close prices. Lower-timeframe historical detail can improve simulated fills where available, but coverage is limited. More detail does not reproduce a complete live trading record. TradingView strategy documentation

Trade order position size and costs matter

The sequence of results changes drawdown. Starting from $10,000, the sequence +$200, −$100, −$100 has a $200 closed-trade drawdown. The sequence −$100, +$200, −$100 has a $100 maximum drawdown. Both finish at $10,000.

Contract size matters too. NQ has a $20 point value compared with MNQ’s $2. The same point move therefore has ten times the dollar effect per NQ contract, before execution differences and costs. CME Micro E-mini futures FAQ

Recalculate with the actual sizing rule, including any compounding or scale-ins. Include commissions, fees, and realistic slippage assumptions: they change trade results and can change the depth and duration of drawdowns. TradingView supports commission and slippage settings, but a fixed slippage assumption cannot precisely simulate future fills. TradingView costs and slippage

Read the methodology before comparing curves

A useful historical report identifies:

• Test dates, instrument, contract or continuous-series treatment, session, and timeframe

• Initial capital, position sizing, overlapping positions, and cost assumptions

• Whether drawdown uses completed trades, sampled equity, or an intrabar calculation

• The reference peak, percentage denominator, data resolution, and execution assumptions

• Whether results are simulated or observed, plus known gaps and limitations

Also examine time spent below the previous peak. A brief decline and a months-long recovery can produce the same maximum drawdown figure.

Historical drawdown describes the selected sample; it does not set a ceiling on future losses. Explore AORDS, a rule-based TradingView indicator for NQ and MNQ, and review its historical performance. Check the dates, definitions, and methodology provided, and ask for missing details before deciding whether it fits your workflow.

Futures trading involves substantial risk of loss and is not suitable for every investor. This article is educational and does not provide personalized investment advice.