Return over Maximum Drawdown (RoMaD)
Total selected-period profit divided by maximum drawdown; in TradesViz it is the same calculation as Recovery Factor.
Formula
More Details
What is RoMaD?
Return over Maximum Drawdown (RoMaD) measures how much profit you generated relative to the worst peak-to-trough decline in your cumulative P&L curve. A higher value means more return was earned for each unit of drawdown experienced.
Formula
RoMaD = Total selected-period P&L / |Maximum Drawdown|
Where:
- Total selected-period P&L = cumulative realized profit or loss under the active TradesViz filters and P&L mode
- |Maximum Drawdown| = the absolute value of the largest peak-to-trough decline in the same cumulative P&L curve
TradesViz uses the non-annualized definition. This keeps RoMaD distinct from the Calmar Ratio, whose return component is annualized.
RoMaD and Recovery Factor in TradesViz
RoMaD and Recovery Factor are exactly the same calculation in TradesViz. Both divide total selected-period P&L by the absolute maximum drawdown. They are displayed separately because traders and analytics platforms use both names.
Consequently, the two values will always match for the same accounts, date range, filters, and P&L mode.
Interpretation
| RoMaD | Meaning |
|---|---|
| < 0 | The selected period has a net loss |
| 0 – 1.0 | Profit is smaller than the worst drawdown |
| 1.0 – 3.0 | Profit is one to three times the worst drawdown |
| > 3.0 | Profit is more than three times the worst drawdown |
For example, total P&L of $8,000 and maximum drawdown of $3,500 produces a RoMaD of 2.29. Recovery Factor will also be 2.29.
Limitations
- It reflects one worst drawdown and does not describe how often drawdowns occur.
- It does not measure drawdown duration.
- Results depend on the selected date range and filters.
- It is unavailable when there is no measurable drawdown because division by zero is undefined.
How TradesViz Calculates It
TradesViz builds cumulative daily realized P&L for the selected trades, measures the largest decline from a running peak, and divides final cumulative P&L by the absolute value of that decline.
Where to find it in TradesViz
Example
Total P&L of $8,000 divided by a $3,500 maximum drawdown gives RoMaD and Recovery Factor values of 2.29.