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IC Markets

Drawdown Calculator

Drawdown Calculator

Understanding the impact of consecutive losses on your trading balance is crucial. Our Drawdown Calculator is designed to help traders and investors visualize and prepare for the potential effects of consecutive losses on their starting balance. Once you've entered all the details, our calculator will compute the total drawdown on your starting balance. This insightful tool allows you to better understand the risks involved in trading and helps in planning your trades with a risk-aware approach.

What is Drawdown in Forex?
Drawdown in Forex trading refers to the reduction in one’s trading capital after a series of losing trades. This metric is important as it helps traders understand the risk involved in their trading strategy. When a trader experiences a drawdown, their account balance decreases from a peak to a trough before recovering back to the peak level. The drawdown percentage represents the amount of loss experienced relative to the account's peak value.
How to Avoid it?
Implementing a solid risk management plan is crucial. This includes setting stop-loss orders and diversifying the trading portfolio can also reduce risk. Traders should avoid over-leveraging their positions, as this can amplify losses. Regularly reviewing and adjusting trading strategies based on market conditions is essential. Emotional discipline is also important to avoid impulsive decisions that can lead to substantial drawdowns.

Compounding Calculator

Compounding Calculator

To understand the potential earnings from your investment over a set number of periods, utilize our compounding calculator provided below. Simply enter the initial balance, the total number of periods for which you'll be compounding this balance, and the percentage gain for each period. The calculator will then display a comprehensive table, detailing the growth of your investment for each period.

Starting Balance: Periods: Gain per Period (%):
What is Compounding?
Compounding refers to the process of reinvesting earnings back into the initial investment, thereby amplifying potential profits. This concept is often described as earning 'interest on interest.' Without reinvesting profits, investment growth remains linear. However, with compounding, as profits are earned on both the initial investment and the reinvested earnings, growth accelerates exponentially.
How to Calculate Compound Interest?
Compound interest is calculated by applying the profit percentage, known as the interest rate, to the principal amount for each compounding period. These periods can vary – they might be daily, monthly, or annually. To calculate compound interest, you need the initial principal amount, the interest rate per period, and the number of periods over which you're compounding.

Fibonacci Calculator

Fibonacci Calculator

To utilize the Fibonacci calculator, simply input a high value and a low value into the designated fields. You also have the option to enter a custom value. Once you've entered these details, select the trend direction (either Uptrend or Downtrend) and click the calculate button. Instantly, you will receive a set of Fibonacci retracement levels. These levels are crucial for traders and can be seamlessly integrated into your forex trading strategy.

How to Use Fibonacci Retracement in an Uptrend?
When dealing with an uptrend, start by identifying the low point and then the high point of the trend. In this scenario, the Fibonacci retracement levels calculated from these points will serve as potential support levels. These levels indicate where the price might pause or bounce back up during a retracement.

How to Use Fibonacci Retracement in a Downtrend?
Conversely, in a downtrend, you should start with the high point and then identify the low point. The retracement levels calculated in this manner will act as potential resistance levels. These are the points where the price might pause or pull back down during a retracement.