Drawdown Calculator
Find the gain needed to recover from a drawdown. A 50% loss needs a 100% gain to get back to even.
How far the account has fallen from its peak.
Per trade or period, optional. Estimates the time to recover.
Optional. The high before the drawdown, to show amounts.
Gain needed
+25%
to undo a 20% loss
Profit needed
$2,000.00
from $8,000.00 back to $10,000.00
Periods needed
23
at +1% compounded (22.4 exact)
| Drawdown | Gain needed | Periods at +1% |
|---|---|---|
| −5% | +5.3% | 6 |
| −10% | +11.1% | 11 |
| −20% | +25% | 23 |
| −30% | +42.9% | 36 |
| −40% | +66.7% | 52 |
| −50% | +100% | 70 |
| −60% | +150% | 93 |
| −75% | +300% | 140 |
| −90% | +900% | 232 |
Losses and gains are asymmetric: after a loss you compound from a smaller base, so the gain needed is always larger than the loss — and it grows fast past 20–30%. The periods estimate assumes a steady average return with every gain reinvested.
Show the math
- Gain needed = 1 ÷ (1 − drawdown) − 1
1 ÷ (1 − 20%) − 1 = 1 ÷ 0.8000 − 1 = 25% - Balance after drawdown
$10,000.00 × (1 − 20%) = $8,000.00 - Profit needed
$8,000.00 × 25% = $2,000.00 - Periods = ln(1 ÷ (1 − drawdown)) ÷ ln(1 + average return)
ln(1.2500) ÷ ln(1.0100) = 22.43, rounded up: 23
Quick answer
Recovering a loss takes a larger percentage gain than the loss itself: gain needed = 1 ÷ (1 − drawdown) − 1. A 50% drawdown needs a 100% gain to break even, a 20% drawdown needs 25%, and a 10% drawdown about 11.1%.
Worked examples: Risk management
Gain needed to recover from a drawdown
Losses and gains are not symmetrical: after a loss you grow a smaller balance, so the gain needed to get back to break-even is always larger than the drawdown. The gap widens fast beyond 20–30%.
| Drawdown | Balance left | Gain to recover | Trades at +2% each |
|---|---|---|---|
| −5% | $9,500 | +5.3% | 3 |
| −10% | $9,000 | +11.1% | 6 |
| −15% | $8,500 | +17.6% | 9 |
| −20% | $8,000 | +25% | 12 |
| −25% | $7,500 | +33.3% | 15 |
| −30% | $7,000 | +42.9% | 19 |
| −40% | $6,000 | +66.7% | 26 |
| −50% | $5,000 | +100% | 36 |
| −60% | $4,000 | +150% | 47 |
| −70% | $3,000 | +233.3% | 61 |
| −75% | $2,500 | +300% | 71 |
| −80% | $2,000 | +400% | 82 |
| −90% | $1,000 | +900% | 117 |
Gain to recover = 1 ÷ (1 − drawdown) − 1. The last column counts consecutive winning trades that each add 2% to the current balance, rounded up.
What is the Drawdown Calculator?
A drawdown is the fall in an account from its peak. Recovering from it always takes a larger percentage gain than the loss, because the gain is earned on the smaller balance that remains.
Gain needed = 1 ÷ (1 − Drawdown) − 1
Periods to recover = ln(1 ÷ (1 − Drawdown)) ÷ ln(1 + Average return)
A 10% drawdown needs an 11.1% gain, 20% needs 25%, 30% needs 42.9%, 50% needs 100% and 90% needs 900%. The gap widens quickly beyond 20–30%, which is why limiting drawdowns matters more than chasing large gains.
A $10,000 account that falls 30% has $7,000 left. Getting back to $10,000 means earning $3,000 on $7,000: 3,000 ÷ 7,000 = 42.86%.
How to use this calculator
- Drawdown — how far the account has fallen from its peak, in %. From $10,000 to $7,500 is 25%.
- Average return per trade or period (optional) — used to estimate how many winning periods the recovery takes, assuming each gain is reinvested.
- Peak balance (optional) and Account currency — fill these in to see the balance after the drawdown and the profit needed in money.
The result shows the gain needed, the balance after the drawdown, the profit needed and the number of periods needed, plus a reference table from 5% to 90% drawdown with your drawdown highlighted. Show the math and Copy link with these numbers are below the result.
Worked example
30% drawdown on a $10,000 peak, averaging +1% per period.
- Gain needed = 1 ÷ 0.70 − 1 = 42.86%
- Balance after the drawdown = $7,000; profit needed = $3,000
- Periods needed = ln(1 ÷ 0.70) ÷ ln(1.01) = 35.8 → 36 periods
50% drawdown on $25,000. $12,500 remains, and it has to double: a 100% gain, or $12,500.
When to use it
- Setting a maximum drawdown rule — decide in advance the loss at which you stop and review.
- Choosing risk per trade — see how losing streaks at different risk levels translate into recovery requirements.
- Comparing strategies — a lower-return strategy with shallow drawdowns can end ahead of one with deep ones.
- After a loss — get a realistic picture of what recovery requires.
Common mistakes
- Assuming symmetry. A 25% loss needs 33.3% to recover, not 25%.
- Increasing size to recover faster. Larger risk after a drawdown makes a deeper drawdown more likely.
- Ignoring leverage. At 1:10 effective leverage, a 5% adverse move is a 50% drawdown, which needs 100% to recover.
- Reading the periods estimate as a schedule. It assumes a steady average return; real results vary.
Frequently asked questions
Why does a 50% loss need a 100% gain?
After a 50% loss half the capital remains, and that half has to double to get back to the peak. Doubling is a 100% gain.
What is the formula for the recovery gain?
Gain needed = 1 ÷ (1 − drawdown) − 1. For a 20% drawdown: 1 ÷ 0.80 − 1 = 25%.
How is the number of periods estimated?
Periods = ln(1 ÷ (1 − drawdown)) ÷ ln(1 + average return), assuming every gain is reinvested. A 20% drawdown at +1% per period takes 22.4, rounded up to 23 periods.
How does risk per trade relate to drawdown?
A single loss of 2% needs about 2.04% to recover; a loss of 20% needs 25%. Ten consecutive losses at 2% each leave about 81.7% of the balance, a drawdown that needs about 22.4% to recover.
What drawdown should be a warning sign?
There is no universal figure, but the recovery requirement rises steeply: 20% needs 25%, 40% needs 66.7%, 75% needs 300%. Many traders and prop firms set hard limits between 10% and 20%.
Related calculators
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Project how an account grows when returns are reinvested, with optional regular deposits.
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Find the lot size that risks exactly the amount you choose, from your balance, risk per trade and stop-loss distance.
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- Regulators
- ASIC, CBI, FSCA, FSA, ADGM
- Min deposit
- $100
- EUR/USD
- from 0.9 pips
- Regulators
- FCA, CySEC, ASIC
- Min deposit
- $50
- EUR/USD
- from 1.0 pips
- Regulators
- St. Vincent and Grenadines
- Min deposit
- $10
- EUR/USD
- from 0.1 pips
- Regulators
- CySEC, FSA
- Min deposit
- $100
- EUR/USD
- from 0.0 pips
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