Drawdown Calculator — How Long to Recover?
Drawdown is the depth of equity decline from peak. The percentage gain needed to recover from a drawdown is always larger than the percentage lost — because you're rebuilding from a smaller base.
Calculator
Result
Notes
- Recovery is non-linear: 10% loss requires 11.1% gain. 20% requires 25%. 50% requires 100%.
- Most professional risk frameworks treat 15–20% drawdown as the maximum tolerable before halting trading to reassess.
- Drawdowns aren't just financial — they're psychological. Most traders quit at 30%+ drawdown.
How to use this calculator
The calculator updates as you type. Try different inputs to understand how each variable changes the outcome. The math is the same as a spreadsheet model — but pre-built so you don't have to remember the formula.
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How to interpret the result
The Drawdown Calculator is a planning tool, not a prediction engine. Use the output to compare scenarios before trading: conservative inputs, realistic average results, and a worst-case case where several trades lose in a row. The number is most valuable when it changes behaviour, for example by reducing trade size, pausing after a drawdown, or choosing demo practice before real balance decisions.
Worked example
Start with the default values, then change one field at a time. If the result becomes unrealistic after a small change, that tells you the plan is fragile. For short-term products, small errors in win rate, payout, average loss, or trade frequency can change the outcome dramatically. Keep a written record of the assumption behind each input.
Limits of the calculator
- It cannot verify the future market, payout, account condition, platform availability, or withdrawal outcome.
- It should not be used to justify higher risk after a losing streak.
- It works best together with a demo log, fixed risk cap, and a rule for stopping when results move outside the plan.
FAQ
Why is recovery harder than loss?
Because you compound from a smaller base. A 50% loss on $100 leaves $50; you need $50 of gain on $50 = 100% to get back.
What's a normal drawdown?
Most strategies have 10–20% max drawdown over a 1-year window. Above 25% is concerning. Above 50% usually requires strategy redesign.
Should I increase risk to recover faster?
No. Increasing risk after losses (revenge trading) is the #1 cause of total blow-up. Reduce risk after drawdowns, not increase.
Open a free demo to apply this
Test sizing rules on a $50,000 demo account before risking real funds.