Drawdown recovery calculator
Find out how much an account has to gain to recover a loss, and how a losing streak adds up. It runs in your browser and nothing is stored.
Your numbers
Find the gain needed to get back to your peak after a .
You know how far the account has fallen, as a percentage.
The loss from your highest balance, as a percentage.
+Money amounts and recovery time (optional)
Add it to see the answer in money.
To see roughly how long recovery could take.
Your answer
Your account is 20% down from its peak. To get back to the peak you need to gain 25% from where you are now. That is more than the 20% you lost, because the gain is measured on the smaller balance.
- How far it fell
- 20%
- Gain needed to recover
- 25%
A smaller loss is much easier to recover. The gain needed grows faster than the loss, which is why limiting the size of a drawdown matters.
+Show the working
- The balance after a 20% drawdown is 0.8 of the peak.
- Gain needed = 1 ÷ (1 − 0.2) − 1 = 0.25, which is 25%.
For information only, not financial advice. Trading carries a high risk of loss. Results depend on the values you enter and on your broker's contract specifications. Risk disclosure
What is drawdown?
Drawdown is how far an account has fallen from its highest balance, shown as a percentage of that high. A balance that rises to $10,000 and then falls to $7,500 is in a 25% drawdown. Traders watch it because it measures the pain of a losing period and how much work is needed to repair the account.
Why recovery is harder than the loss
A loss and the gain that undoes it are measured from different balances. After a 25% loss the account holds 75% of its peak, and a gain is a percentage of that smaller amount. To get back to 100% it has to grow by 25 ÷ 75 = 33.3%. The effect is small for small losses and very large for deep ones.
How it is calculated
- Drawdown = (peak balance − current balance) ÷ peak balance.
- Gain needed = peak balance ÷ current balance − 1, which is the same as 1 ÷ (1 − drawdown) − 1.
- After a losing streak, balance = starting balance × (1 − risk per trade)^number of losses.
- Periods to recover = ln(1 + gain needed) ÷ ln(1 + return per period), rounded up.
Gain needed to recover from each loss
| Loss from the peak | Gain needed to get back |
|---|---|
| 10% | 11.1% |
| 20% | 25.0% |
| 25% | 33.3% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100% |
| 60% | 150% |
| 75% | 300% |
| 90% | 900% |
How a losing streak adds up
If each trade risks a fixed percentage of the current balance and every trade in a row loses, the drawdown grows with the streak. The table shows the drawdown after a number of consecutive losses.
| Risk per trade | 5 losses in a row | 10 losses in a row | 20 losses in a row |
|---|---|---|---|
| 1% | 4.9% | 9.6% | 18.2% |
| 2% | 9.6% | 18.3% | 33.2% |
| 5% | 22.6% | 40.1% | 64.2% |
Real losing streaks include winning trades as well, so this is the worst case for a given run of losses, not a forecast. It shows how quickly a larger risk per trade turns a bad run into a deep drawdown.
Limits to keep in mind
- The recovery time assumes the same positive return in every period. Real returns are uneven, so recovery can take much longer than the estimate.
- Deposits and withdrawals change the balance without being trading results, so use the balance before and after trading only.
- Leverage can make a drawdown deeper than the percentage move in the market.
- Nothing here is advice about how much to risk. It only shows the arithmetic of losses and recovery.
Frequently asked questions
+What is a drawdown?
A drawdown is the fall in an account from a peak to a later low, usually shown as a percentage of the peak. If a balance falls from $10,000 to $8,000, the drawdown is 20%. The largest fall seen over a period is called the maximum drawdown.
+Why does a 50% loss need a 100% gain to recover?
The gain is measured from the lower balance. After losing half of $10,000 you have $5,000, and getting back to $10,000 means doubling it, which is a 100% gain. The deeper the loss, the bigger the gap between the loss and the gain needed.
+How do I calculate the gain needed to recover?
Divide 1 by one minus the loss, then subtract 1. For a 25% loss that is 1 ÷ 0.75 − 1 = 33.3%. Or divide the peak balance by the current balance and subtract 1.
+How does a losing streak add up?
If every trade risks 2% of the current balance and ten trades in a row lose, the balance is multiplied by 0.98 ten times and ends at about 81.7% of where it started, an 18.3% drawdown. Each loss is a little smaller in money than the last, because it is a percentage of a shrinking balance.
+Does the recovery time include losing trades on the way back?
No. The time estimate assumes the same positive return in every period, which real trading does not give. It only shows how the size of the gain needed turns into time at a given pace, and real recovery can take much longer.