Drawdown Recovery Calculator
Losses and the gains needed to recover them are not symmetrical, and the gap widens fast. Enter a drawdown percentage to see what it actually takes to get back to where you started.
Required gain % = (Drawdown % ÷ (100 − Drawdown %)) × 100
- Gain needed to break even
- 33.3%
| Drawdown | Gain needed to recover |
|---|---|
| 10% | 11.1% |
| 20% | 25.0% |
| 25% | 33.3% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100.0% |
Free to use, no sign-up. Nothing you type here is sent anywhere — the calculation runs entirely in your browser.
The asymmetry that makes drawdowns dangerous
A 10% loss needs an 11.1% gain to recover. A 25% loss needs 33.3%. A 50% loss needs 100% — you must double what is left. At 75% down, you need a 300% gain.
The reason is that the gain is earned on a smaller base than the loss was taken on. This is not a psychological point; it is arithmetic, and it is why capping the size of any single loss matters more than maximising the size of any single win.
Why this drives position sizing
Risk-per-trade compounds on the downside exactly as it does on the upside. Ten consecutive losses at 1% risk leave you down about 9.6% — recoverable. Ten consecutive losses at 5% leave you down over 40%, needing a 67% gain to break even.
Losing streaks of that length are statistically normal for many perfectly good strategies. The question is not whether one arrives but whether your sizing lets you still be trading when it ends.
Max drawdown as a survivability test
Expectancy tells you a strategy works on average. Max drawdown tells you what the worst realistic stretch looks like — and whether you can survive it financially and psychologically.
A strategy with excellent long-run expectancy and a 35% historical max drawdown demands real conviction to hold through, and most people abandon it near the bottom. Knowing the number in advance is what makes holding on possible.
Frequently asked questions
What gain is needed to recover a 50% drawdown?
100%. A 50% loss halves the account, so the remaining balance has to double to return to the starting point. The formula is (drawdown ÷ (100 − drawdown)) × 100.
Why do you need a bigger gain than the loss to break even?
Because the recovery is earned on a smaller base. Lose 25% of $100,000 and you have $75,000 — the $25,000 you need back is 33.3% of $75,000, not 25%.
What is a acceptable max drawdown?
It depends on what you can hold through without abandoning the strategy. Many traders find anything past 20-30% hard to sit with. The practical test is whether you would still follow your rules at the bottom of that stretch.
How do I reduce my drawdowns?
Cap risk per trade, account for correlation between open positions — several positions expressing the same theme tend to lose together — and stop moving stops, which converts a defined loss into an open-ended one.