Drawdown recovery calculator
Losing 50% needs a 100% gain to get back to break-even. Enter a drawdown percentage to see the recovery gain required, a useful reminder of why protecting capital comes first.
Results
- Gain required to recover
- 25%
| Drawdown (%) | Gain required to recover |
|---|---|
| 5% | 5% |
| 10% | 11% |
| 20% | 25% |
| 30% | 43% |
| 50% | 100% |
| 75% | 300% |
These tools are for education only. Check your broker's contract specifications — pip sizes, lot sizes and margin rules vary.
What is drawdown and why is recovery asymmetric?
Drawdown is the drop from an account's peak to its lowest point afterwards, expressed as a percentage. If an account grows to $10,000 and falls to $8,000 it is in a 20% drawdown. Recovery is the gain, measured from the low, that brings the account back to its previous peak.
Losses and gains are not symmetric. After a 20% loss you have 80% of your capital left, and getting back to 100% from 80% is a 25% gain. After a 50% loss you need 100%; after 75% you need 300%. The deeper the hole, the disproportionately harder the climb — which is the mathematical reason every serious risk plan starts with limiting drawdown.
How to use the drawdown calculator
Work out your drawdown percentage
Divide the drop from the peak by the peak: ($10,000 − $8,000) ÷ $10,000 = 20%. Use the equity peak, not the starting deposit.
Enter it in the calculator
Type the percentage; the required recovery gain updates instantly.
Compare with your average monthly return
If recovering needs 43% and you average 3% a month, you are looking at about a year of normal trading just to get back to even.
Set a maximum drawdown rule
Choose the point at which you stop, reduce size or review the strategy — many traders and all prop firms use 10% or less.
Drawdown recovery formula
Required gain % = Drawdown % ÷ (100 − Drawdown %) × 100
Equivalently: Gain = D ÷ (1 − D)Example: a 30% drawdown leaves 70% of the capital. Gain needed = 30 ÷ 70 = 42.9%. Other useful points: 10% needs 11.1%, 20% needs 25%, 40% needs 66.7%, 50% needs 100%, 75% needs 300%, 90% needs 900%.
Drawdown control tips
- Keep risk per trade at 1–2% so a streak of ten losses stays under a 20% drawdown, where recovery is still a realistic 25%.
- Cut position size when in drawdown (for example, halve it after −10%) and restore it only once the account makes a new equity high.
- Track drawdown from the equity peak, including floating losses — the number your prop firm or investor sees is the one that matters.
- Set a daily loss limit. Most catastrophic drawdowns come from a single day of revenge trading, not from a strategy slowly failing.
Drawdown FAQ
How much gain do I need to recover from a 20% loss?
25%. A $10,000 account down 20% has $8,000; $8,000 × 1.25 = $10,000. The gain is measured on the smaller remaining balance, so it is always larger than the loss percentage.
Why does a 50% loss need a 100% gain?
Because you are left with half the capital. Doubling $5,000 gets you back to $10,000, and a 100% gain is the same as doubling. This is why halving an account is so hard to recover from in practice.
What is maximum drawdown?
The largest peak-to-trough decline an account or strategy has experienced over a period. It is the standard measure of how painful a strategy is to trade and the key rule in prop-firm evaluations.
What is an acceptable drawdown for a trader?
Professional managers typically aim for maximum drawdowns of 10–20%. Prop firms enforce 5% daily and 10% total limits. Anything above 30% needs a 43%+ recovery and usually indicates oversized positions.
What is the difference between absolute and relative drawdown?
Absolute drawdown measures the fall below the initial deposit. Relative (or maximal) drawdown measures the largest fall from any equity peak, in percent, and is the figure this calculator uses.
How do I recover from a large drawdown?
Reduce size, go back to the setups that have proven statistics and accept that recovery takes time — at 3% a month a 40% drawdown needs around 18 months. Trying to recover fast with bigger positions is how a 40% drawdown becomes 70%.