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Drawdown recovery calculator

Find the percentage gain needed to return to a previous peak after a drawdown of any size.

Enter the drawdown as
Gain needed to recover —
Drawdown —
Balance must grow by a factor of —
Amount to recover —
Reference

Gain needed after common drawdowns

Each row is computed with the formula below. The gap between the two columns widens quickly: small drawdowns need a little more than their own size to recover, and large ones need several times their size.

Gain needed to recover from a drawdown
DrawdownGain needed
5%5.3%
10%11.1%
15%17.6%
20%25.0%
25%33.3%
30%42.9%
35%53.8%
40%66.7%
50%100.0%
60%150.0%
70%233.3%
75%300.0%
80%400.0%
90%900.0%
95%1,900.0%
Method

How it is calculated

drawdown = (peak − current) ÷ peak remaining = 1 − drawdown gain = drawdown ÷ remaining

A drawdown is a fall measured from the highest balance, the peak. After a drawdown of 20%, 80% of the peak is left. To get back, that smaller balance has to grow by the missing 20% of the peak, which is a larger share of what remains: 20 ÷ 80 = 25%.

The same logic explains why a 50% drawdown needs a 100% gain: half the peak is left, and it has to double. A 100% drawdown leaves nothing to grow, so no gain recovers it.

Worked example

From a peak of 10,000

Balance nowDrawdownWorkingGain neededAmount
9,00010%10 ÷ 9011.1%1,000
8,00020%20 ÷ 8025.0%2,000
6,50035%35 ÷ 6553.8%3,500
5,00050%50 ÷ 50100.0%5,000

The amount to recover is always the same as the amount lost. What changes is how large that amount is compared with the balance that has to earn it back.

Notes

Pitfalls and assumptions

  • Measure from the peak. Drawdown is the fall from the highest balance, not from the starting deposit. An account that grew from 10,000 to 12,000 and fell to 10,800 is in a 10% drawdown even though it is above its start.
  • Deposits and withdrawals distort balances. Adjust the peak for money added or taken out, or the drawdown figure will be wrong.
  • Costs are extra. Commission, swap and fees during the recovery add to the gain needed.
  • Gains compound, and so do losses. A 25% recovery in several steps is not five 5% steps: five gains of 5% multiply to 27.6%. The compounding calculator shows the path at a steady rate.
  • Prop-firm limits are different. A firm's maximum loss rule is usually measured in money from a fixed or trailing floor, not as a recovery percentage. The prop firm drawdown calculator handles those rules.
Questions

Frequently asked questions

Why does a 50% loss need a 100% gain to recover?

After a 50% loss, half the peak balance is left. Getting back to the peak means that half has to double, and doubling is a 100% gain. Percentage losses and gains are measured against different starting amounts, which is why they are not symmetrical.

How do you calculate the gain needed to recover from a drawdown?

Divide the drawdown by what is left: gain = drawdown ÷ (1 − drawdown). For a 30% drawdown, 0.30 ÷ 0.70 = 42.9%.

What gain recovers a 10% drawdown?

11.1%. A balance that falls from 10,000 to 9,000 needs to gain 1,000, and 1,000 is 11.1% of 9,000.

Is drawdown measured from the starting balance or the peak?

Drawdown is normally measured from the peak, the highest balance reached before the fall. Some prop-firm rules measure a maximum loss from the starting balance instead; check the definition the source uses.

How long does it take to recover from a drawdown?

It depends entirely on future returns, which are not known. As arithmetic only: at a steady return of r per period, recovery takes ln(1 ÷ (1 − drawdown)) ÷ ln(1 + r) periods. A 20% drawdown at a steady 2% per period takes about 11.3 periods.

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