Drawdown Calculator
Find the gain you need to recover from a drawdown, and how fast losses can add up.
Calculation Results
For education only. Not financial advice. Trading involves substantial risk of loss.
A drawdown is the fall from an account’s peak to its lowest point. Enter your drawdown percentage to see the gain needed to get back to your previous high. Enter your risk per trade to see how many losses in a row would cut your account in half.
The formula
Gain needed = Drawdown ÷ (1 − Drawdown)
Losses shrink the base you are earning from, so the recovery is always larger than the loss.
| Drawdown | Gain needed to recover |
|---|---|
| 10% | 11.1% |
| 20% | 25% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100% |
| 75% | 300% |
The losing-streak calculation
At a fixed percentage risk per trade, consecutive full losses reduce the account by that percentage each time. At 2% risk, it takes about 35 straight losses to fall below half the account. At 10% risk per trade, it takes only 7. Streaks happen even in profitable strategies, and this is why risk per trade should be small.
What to do with this
- Choose a maximum drawdown you can accept, such as 15% or 20%.
- Set your risk per trade so a realistic losing streak stays inside it.
- Decide in advance what you will do at that limit: reduce size, pause, or review your journal.
- Never try to win it back in one trade. That is how a 20% drawdown turns into 40%.
FAQ
Why is a 50% loss so hard to recover? You need to double what is left. Losing half of $10,000 leaves $5,000, and getting back to $10,000 takes a 100% gain.
What is a normal drawdown? It depends on the strategy. Higher-return strategies usually have deeper drawdowns. Test yours with historical or journaled results.
Does the losing-streak figure assume every trade loses? Yes, it is a worst-case run of full stop-outs at a constant risk percentage.
Related tools: Position Size Calculator · Compounding Calculator · All trading tools
Educational use only. Not financial advice.
