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Drawdown Recovery Calculator
Turn a drawdown percentage, or a peak and current balance, into the gain required to get back to the old high.
Drawdown inputs
Recovery result
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The recovery gain after a drawdown is DD / (1 - DD), not the same percentage as the loss. A 20% drawdown needs 0.20 / 0.80 = 25% to recover. A 50% drawdown needs 100%, and a 90% drawdown needs 900%.
How it works
Why drawdown recovery is nonlinear
Drawdown recovery is nonlinear because the account base gets smaller after a loss. Losing 20% leaves 80% of the prior peak, so the recovery gain is measured from the smaller 80% base. That is why "lose X%, make X% back" is false.
The formula
Use drawdown as a decimal dd:
required gain = dd / (1 - dd) = 1 / (1 - dd) - 1
If you enter peak and current balance, the tool first calculates dd = (peak - current) / peak. It can also show the lost amount and current balance.
Recovery trades
If each recovery trade compounds at a positive return g, the number of trades needed is:
n = ln(1 / (1 - dd)) / ln(1 + g)
The displayed value is rounded up with ceil(n). For a 20% drawdown and 2% per trade, ceil(ln(1/0.8) / ln(1.02)) = 12.
Worked examples
A 10% drawdown needs 11.11% to recover. A 20% drawdown needs 25%. A 30% drawdown needs 42.86%. A 50% drawdown needs 100%. A 90% drawdown needs 900%.
Common mistakes
- Confusing percentages with decimals. The formula uses
0.20for a 20% drawdown, not 20. - Assuming equal percentages cancel. A 20% loss followed by a 20% gain leaves
0.8 × 1.2 = 0.96, still below the peak. - Ignoring the 100% case. At a 100% drawdown the denominator is zero, so the required gain is divergent and the tool marks it as not recoverable.
Frequently asked questions
How much gain is needed after a 20% drawdown?
0.20 / 0.80 = 25% to recover.How much gain is needed after a 50% drawdown?
0.50 / 0.50 = 100%. The account must double from the reduced base to return to the old peak.Why does a 10% loss need more than a 10% gain?
How are recovery trades calculated?
ln(1/(1-dd)) / ln(1+g) and rounds up. For 20% drawdown and 2% per trade, the result is 12 trades.