Drawdown Recovery Calculator
See the decline and the gain needed to recover.
Recovery summary
20%
25%
Loss and recovery use different starting balances. A 20% loss needs a 25% gain.
Calculation details
- Equity lost
- $2,000
- Peak equity
- $10,000
- Current equity
- $8,000
Understand the calculation.
Drawdown = (peak − current) ÷ peak × 100. Recovery gain = (peak − current) ÷ current × 100.
Losses and recovery gains use different starting balances. Enter a previous equity peak and the current equity to see the decline and the gain needed to return to that peak.
How to use the calculator
- Enter the highest relevant account equity before the decline.
- Enter current equity using the same valuation basis.
- Exclude or adjust for deposits and withdrawals so cash flows are not mistaken for performance.
- Read the recovery percentage as arithmetic, not a target or a reason to increase risk.
Worked example
An account that falls from $10,000 to $8,000 is down 20%. Recovering $2,000 from the smaller $8,000 balance requires a 25% gain. A 50% drawdown needs a 100% recovery gain. At zero equity, no finite percentage gain can restore the account without adding capital.
What this calculation assumes
- A single peak-to-current comparison, not a maximum-drawdown scan of a full equity curve.
- No deposits, withdrawals, or currency conversion between the two balances.
- Balance-only and mark-to-market equity can show different drawdowns. Use a consistent measure.
Educational estimates, not trade recommendations. Actual fills and exchange rules can change outcomes. Money inputs use one consistent quote currency; the $ symbol is an example currency label.
Frequently asked questions
Why does a 20% loss need a 25% gain?
After losing 20% of $100, only $80 remains. The $20 needed to recover is 25% of $80. The denominator is smaller after the loss.
Does this calculate maximum drawdown?
Only if your inputs are the peak and subsequent trough of the largest decline. Maximum drawdown over a period requires scanning the entire equity series in time order.
Should I raise leverage to recover faster?
The recovery percentage says nothing about an appropriate trade or risk level. Increasing leverage by increasing exposure can deepen a drawdown. Review the process and risk limits separately.
Formula references
Read the reasoning
Drawdown Recovery: Why a 20% Loss Needs a 25% Gain
Calculate drawdown and recovery correctly, separate cash flows from performance, and use your journal to investigate the decline.
From the journalPosition Sizing: A Process Decision, Not a Fear Decision
Position sizing protects your trading process from emotional decisions. Learn how to set a risk rule, calculate size, and review execution.
From the journalTrading Journal for Funded Account Traders: A Practical Guide
Use a trading journal to document risk, track your process, and review trades against the rules that govern a funded account.
Keep calculating
Position Size Calculator
Calculate crypto position size from account risk, entry, stop loss, and trading fees. See quantity, notional value, and planned risk. Free, no signup.
Trading Expectancy Calculator
Calculate trading expected value from win rate, average win, average loss, and costs. Measure expectancy in R or money and find the breakeven threshold.