How deposits hide drawdown
A balance chart mixes deposits with trading. Three real accounts show money paid in passing for growth, and the one number deposits cannot move.
A signal page leads with a line that climbs. Most readers take that line as the strategy’s result. It is not. The line is the account balance, and the balance moves for two reasons: the trading, and the owner moving money in or out.
When the owner pays in money after a loss, the balance recovers without a single winning trade. The chart then shows a small dip where the strategy actually lost a large share of the account. This post shows that on three real accounts, and names the number that cannot be fooled.
Three accounts, three balance lines
The accounts below are real signal histories from our corpus. Their names and numbers are anonymized, so we call them A, B and C. The engine found money paid in right after a deep drawdown in all three: 2, 4 and 8 times. Amounts are in each account’s own currency, which the files do not state.
- Balance, first to last
- 500 → 4,835
- Paid in by 21 deposits
- 13,519
- What the trading made
- −6,246
- Time-weighted drawdown
- −76%
- Balance
- Trading alone, without deposits and withdrawals
- Deposit
Account A is the clearest case. It opened with 500 and ended with 4,835. Read as a chart, that is growth of about 867%. But 21 deposits paid in 13,519 along the way, and the trading itself lost 6,246. Every rise in the balance that came with an amber tick was the owner’s money, not the strategy’s. The red dashed line shows what the trading alone did: the balance minus every deposit and withdrawal. It ends at −6,246, far below a balance that never looked like a loss.
Account B is the same story at a smaller size. The balance went from 123 to 401. The 12 deposits added 506, and the trading lost 104.
Account C shows the mirror image. Its 19 withdrawals took out 54,731, so its balance line falls off a cliff, yet its trades made 860 in total. Withdrawals make a balance chart look worse than the trading was, just as deposits make it look better.
The number that deposits cannot move
Time-weighted return splits the history at every deposit and withdrawal. It measures the return of each stretch between two money movements, then multiplies those returns together. A deposit starts a new stretch, so it can neither add growth nor fill in a hole.
Switch the chart to “Time-weighted growth” and the three accounts tell the truth:
- Account A, deepest time-weighted drawdown
- −76%
- Account B, deepest time-weighted drawdown
- −66%
- Account C, deepest time-weighted drawdown
- −75%
Account A lost 76% of its value at the worst point, and ended 48% down on a time-weighted basis. Account B fell 66% before its owner topped it up. Account C, whose balance chart looked like a collapse, ended 8% down: a loss, but nothing like what its balance line suggests.
How common this is
This is not a rare trick. We ran the engine over 2,321 live forex signal histories. It found a deposit made shortly after a deep drawdown in 578 of them, which is 25% of the corpus. Some of those owners were simply adding capital. Others were keeping a losing account alive. The balance chart looks the same in both cases, which is exactly the problem.
What to do with your own report
- Find every deposit and withdrawal in the history. On an MQL5 export they are the rows of type Balance.
- Check whether a deposit arrived right after a fall in the balance. That is the pattern that hides a drawdown.
- Judge the strategy on its time-weighted return, never on the balance drawdown line.
Monetio does all three when you drop the file: it marks every deposit on the equity chart, flags a deposit made inside a drawdown, and reports the time-weighted numbers next to the balance.