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Drawdown Recovery Calculator
Calculate the gain required to recover from a drawdown. Understand why protecting capital is more important than chasing returns.
Drawdown Recovery Calculator Formula
Gain Needed = (Peak ÷ Current − 1) × 100%
Example: Peak $10,000, current $7,000 (−30%): ($10,000 ÷ $7,000 − 1) × 100 = 42.9% gain needed
Drawdown Recovery Calculator FAQ
1Why does recovery require more than the loss percentage?
Because the gain is calculated on a smaller balance. A 50% loss requires a 100% gain to recover. A 20% loss needs 25%. This is why risk management matters.
2What is a safe maximum drawdown?
Professional traders aim to keep maximum drawdown below 20%. Drawdowns above 30% become increasingly difficult to recover from and can destroy trading psychology.
3How many consecutive losses cause a 50% drawdown?
It depends on your risk per trade. Risking 2% per trade, it takes about 34 consecutive losses to hit 50% drawdown. Risking 5% per trade, only 13 consecutive losses reach that level.
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Calculator results are estimates only — not financial advice. Trading involves significant risk of loss. Full risk disclosure.