Drawdown Recovery Calculator
A 50% loss needs a 100% gain. See what yours needs.
Why drawdowns are asymmetric
| Drawdown | Gain required |
|---|---|
| 5 % | 5.26 % |
| 10 % | 11.11 % |
| 20 % | 25.00 % |
| 30 % | 42.86 % |
| 40 % | 66.67 % |
| 50 % | 100.00 % |
| 60 % | 150.00 % |
| 70 % | 233.33 % |
| 80 % | 400.00 % |
| 90 % | 900.00 % |
How it works
A drawdown and its recovery are not symmetric, because the gain is measured against a smaller balance than the loss was. Lose 20% and you need 25% back; lose 50% and you need 100%; lose 80% and you need 400%.
This is the whole argument for conservative position sizing in one line. Capital preservation is not caution for its own sake — it is the recognition that the cost of recovery grows faster than the loss itself, and that deep drawdowns are paid for in time you do not get back.
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How the Drawdown Recovery Calculator works
Losing money and making it back are not symmetric operations. A 50% drawdown requires a 100% gain to recover, because the gain is earned on the smaller balance the loss left behind. This calculator shows the recovery required for any drawdown and how long it takes at your average return.
The arithmetic of the hole
Lose 10% and you need 11.1% back. Lose 20%, you need 25%. At 50% you need 100%, at 75% you need 300%, and at 90% you need 900%. The curve is flat and forgiving at the left, then turns almost vertical.
The reason is simple: the loss is a percentage of a larger number, and the recovery is a percentage of a smaller one. Each additional percent lost costs disproportionately more to undo than the one before it.
Why this is the argument for small position sizes
Everything in trading risk management follows from this asymmetry. Capital preservation is not timidity — it is the recognition that staying in the shallow part of the curve keeps recovery a routine matter, while the deep part turns it into a project measured in years.
It also explains why a strategy's worst drawdown matters more than its average return. Two systems with identical annual returns are not equivalent if one of them gets there through a 60% drawdown: that one requires a 150% gain to recover, and most traders abandon it long before.
Recovery in time, not just percent
Enter your average net return per trade and the calculator converts the required gain into a number of trades. This is often the more sobering figure. A 30% drawdown needs 42.9% back — at 1% average per trade that is around 36 winning trades, and in practice considerably more, since not every trade wins.
Time is the cost that never appears in the percentage. Understanding what a deep drawdown does to your schedule is usually more persuasive than the ratio itself — and the risk of ruin simulator shows how likely you are to get there in the first place.
FAQ
What is considered a large drawdown?expand_more
Under 20% is normal for most strategies. Twenty to 35% is uncomfortable but survivable. Beyond 50% you are in territory where the recovery maths is genuinely hostile and where most traders change approach — often at exactly the wrong moment.
How do I limit drawdown?expand_more
Position size is the primary control: risk per trade sets the depth of a losing streak almost directly. Beyond that, capping correlated positions helps, because taking five trades on assets that move together is one trade in five pieces.
Is drawdown measured from peak or from starting balance?expand_more
From peak equity, which is the standard definition — it captures what you actually gave back rather than only losses below where you started. An account up 40% that falls to up 10% has taken a 21% drawdown even though it is still in profit.