Free calculator
Drawdown Recovery Calculator
Losses and gains are not even. Type in how much an account is down, and see how much it has to grow just to get back to even.
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Pure percent math, so it is the same for any market.
A 20% loss requires a 25.0% gain to get back to breakeven. This is not a typo. Math is lopsided: losses hurt more than equal gains help.
If you start with $10,000 and take a 20% drawdown, your account drops to $8000. To get back to $10,000 you need to turn that into a 1.25x, which is a +25.0% gain on the reduced balance.
The asymmetry table
For learning and planning. The numbers are math on what you type, not a prediction.
Open TradingView chartsAffiliate link. Charting software, not a signal.
What is drawdown recovery?
A drawdown is how far an account has fallen from its high point. Winning it back takes a bigger percent than the loss, because you are growing a smaller amount.
This is one of the main reasons Candleread teaches risk in Grade 4, before any strategy.
The formula in plain words
- Gain needed = the loss divided by what is left.
- Write the loss as a decimal: 20% is 0.20.
Gain needed = Loss ÷ (1 − Loss)
Worked example
A $10,000 account that falls 20%
- 1The account drops to $8,000.
- 2To get back to $10,000 it has to grow by $2,000.
- 3$2,000 ÷ $8,000 = 0.25, which is a 25% gain.
- 4Same math for a 50% loss: 0.50 ÷ 0.50 = 1.00, a 100% gain.
A 20% loss needs a 25% gain to recover. A 50% loss needs a 100% gain.
Common mistakes
- Thinking a 30% loss needs a 30% gain. It needs about 43%.
- Trading bigger to win it back faster. Bigger size makes the next loss bigger too.
- Only measuring drawdown on closed trades. Open losses count too.
Questions people ask
What is maximum drawdown?
It is the biggest drop from a high point to a low point over a period. It shows the worst stretch an account went through.
How do I keep drawdowns small?
Risk a small, fixed part of the account on each trade and stop after a set number of losses in a row. The position size calculator helps with the first part.
Why is recovery harder than losing?
After a loss there is less money working for you. The same percent gain on a smaller balance adds fewer dollars.
Learn the idea behind it
The calculator does the math. These free lessons explain when and why to use it.
Need a broker to practice?Start with a Genesis demo accountPaid partner link
Demo first. Trading has risk of loss. Education, not financial advice.