Hey all

What exactly does drawdown refer to and how can I calculate the true DD%.

I am running the Beastie EA and on a 5k demo I have seen it down 700 dollars (I am testing with high lots)

so which should be approximately 12 percent drawdown but if I generate a thorough Statement in MT4 it says that the drawdown is just 2%

Is maximum drawdown not the highest amount of cash your open trades has dropped?

EDIT:
Forgot to mention I was up 500, so about 10%. So drawdown must mean how deep in your initial deposit you move?