Why Does My Strategy Show a Max Drawdown of 150%?
A 150% max drawdown in TradingView or TradersPost likely results from futures leverage and missing margin restrictions. To get realistic results, traders should adjust margin settings and use broker-provided paper accounts.
Understanding Unrealistic Drawdowns in TradingView
If a TradingView strategy reports a max drawdown of 150%, it is likely due to futures trading with high leverage and a lack of proper margin settings. In reality, an account cannot lose more than 100% of its value—but in simulated backtests, the system does not always account for margin requirements and liquidation rules.
By default, TradingView does not impose margin restrictions, which means a strategy can continue placing trades even after the account would have been liquidated in real trading. To fix this, traders should:
• Adjust the margin settings for long and short positions in TradingView.
• Enable slippage and commissions in the backtest settings to better simulate real trading conditions.
Why TradersPost Paper Trading May Show Unrealistic Results
For traders using TradersPost’s paper trading feature, it’s important to note that it is a simple simulator designed for generic trade testing. It does not:
• Account for margin requirements or liquidation rules.
• Simulate slippage or trading commissions.
Because of these limitations, TradersPost paper trading should not be relied on for exact risk calculations. Instead, traders should use the paper trading accounts provided by their broker, such as Tradovate or TradeStation, which offer more accurate simulations for futures trading.
Conclusion
A max drawdown of 150% in TradingView or TradersPost is likely due to incorrect margin settings and a lack of liquidation enforcement. Traders should adjust margin limits in TradingView and use broker-provided paper accounts for more realistic trade performance analysis.
