Drawdown recovery calculator
Losses and recoveries are not symmetric. A 50% loss needs a 100% gain to undo. This shows the number for your account.
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Recovery gain = drawdown ÷ (1 − drawdown). Down 20%? You need 25% to get back. Down 50%? You need 100%. Down 80%? You need 400%. The requirement accelerates because you are earning it on a smaller base.
Key takeaways
- The recovery required grows faster than the loss, and the curve steepens sharply past 30%.
- Maximum drawdown is the single most informative statistic about a strategy. More than win rate, more than total return.
- Avoiding deep drawdowns is a position-sizing problem before it is a strategy problem.
- Deep drawdowns also break the trader. Most accounts are abandoned, not liquidated.
Why the asymmetry exists
A 50% loss on $10,000 leaves $5,000. To get back to $10,000 you have to double the $5,000, a 100% gain. The percentage that took you down was calculated on the larger balance; the percentage that brings you back is calculated on the smaller one. That is the entire mechanism, and it is why the table below bends the way it does.
| Drawdown | Gain required | In practice |
|---|---|---|
| 5% | 5.3% | A normal week |
| 10% | 11.1% | Recoverable, uncomfortable |
| 20% | 25% | Most funds' hard risk limit |
| 30% | 42.9% | Months of work to undo |
| 50% | 100% | You must double the account |
| 75% | 300% | Effectively a new account |
| 90% | 900% | Not realistically recoverable |
Controlling drawdown
Drawdown is not something that happens to you; it is a consequence of choices that can be made in advance.
- Fix risk per trade as a percentage. At 1% per trade, twenty consecutive losses cost 18% of the account. At 5% per trade the same run costs 64%. Run the numbers in the risk of ruin calculator.
- Set a daily and weekly stop. A hard rule that closes the platform after three losses in a day converts an emotional spiral into a bounded loss.
- Watch correlation. Long EUR/USD, long GBP/USD and short USD/CHF at 1% each is not 3% of risk in three trades, it is roughly 3% of risk in one dollar trade.
- Cut size during a drawdown, not after it. Reducing risk while you are down slows the bleed and slows recovery. Most traders do the opposite, increasing size to get back faster, which is how a 20% drawdown becomes a 60% one.
The same calculators are inside the MarketPro app
MarketPro ships position size, pip value, margin, profit, risk-to-reward and compounding calculators alongside the signal feed, so you can size a trade on the same screen you read it on. Download free. Vetted free signals every week, no card needed.
Drawdown recovery calculator: questions
What is an acceptable maximum drawdown?
What is the difference between absolute and relative drawdown?
Does drawdown include open positions?
Size the trade, then take the trade
MarketPro publishes every signal with an explicit entry, stop and take-profit levels, which is what makes these calculations possible before you click. Start with the free weekly signals.
Not investment advice. Past performance is not indicative of future results.