Drawdown recovery calculator
A loss always takes a bigger percentage gain to win back, because the recovery is earned on a smaller balance. Enter your peak balance, where your account stands now and the monthly return you expect, plus any deposits, and this calculator shows the gain you need and how many months it will take. The table underneath shows how fast the climb gets steeper as drawdowns get deeper.
The drop and the climb back
The size of your drawdown next to the gain needed to undo it.
Deeper drawdowns, steeper climbs
Gain needed and months to recover at your monthly return, for drawdowns from mild to severe. Your drawdown is highlighted.
| Drawdown | Gain needed | Months at your return | Years |
|---|
How recovery is worked out
Recovery is about compounding from a lower base. The calculator works out the gain you need, then counts the months it takes for monthly returns to compound up to it.
Drawdown
How far the balance has fallen from its peak.
drawdown = (peak − now) ÷ peak
Gain needed
The return on today's balance that gets back to the peak.
gain needed = peak ÷ now − 1
Months by trading alone
How many months of compounding at your return.
months = ln(peak ÷ now) ÷ ln(1 + monthly return)
Months with deposits
Month by month, the balance grows by your return and then your deposit is added, until it reaches the peak.
balance = balance × (1 + return) + deposit
Drawdown recovery questions
Why do you need a bigger gain to recover from a loss?
Because the gain is earned on a smaller balance. Lose 50 percent of $10,000 and you have $5,000; getting back to $10,000 means doubling it, a 100 percent gain. The deeper the drawdown, the faster the required gain climbs.
How do you calculate the gain needed after a drawdown?
Divide 1 by (1 minus the drawdown), then subtract 1. A 20 percent drawdown needs 1 divided by 0.8, minus 1, which is 25 percent. A 75 percent drawdown needs 300 percent.
How long does it take to recover from a drawdown?
It depends on your monthly return. Recovering from a 30 percent drawdown at 2 percent a month takes about 18 months, because the required 43 percent gain compounds slowly. Deposits shorten it, which the calculator shows separately.
Do deposits count as recovering?
They bring the balance back to its old high, but they do not recover the trading loss. The calculator shows both: when the balance gets back to the peak, and when trading alone would have earned the loss back.
How can I avoid deep drawdowns?
Risk a small, fixed share of the account per trade, cap how much you can lose in a day or week, and stop trading for a while after a set drawdown. Our position size calculator helps keep each trade small.
Should I trade bigger to recover faster?
Usually not. Raising risk after losses makes another drawdown more likely and deeper. Most recoveries come from sticking to the same method at the same size, or smaller, until the account is back.