Why drawdowns are asymmetric
A drawdown is the fall from an account's peak to its lowest point before a new peak. Losses and gains are not symmetric: lose 50% and you need a 100% gain just to get back to where you started. The drawdown recovery calculator shows the gain needed to recover from any drawdown, and how a run of losing trades compounds at your risk per trade.
How to use the calculator
In the first part, enter a drawdown percentage and, optionally, your account balance to see the amount lost and the gain needed to recover. In the second part, enter your risk per trade and a number of consecutive losses to see how deep that streak would take you — each loss is a percentage of the already reduced balance.
The formulas
gain to recover = drawdown ÷ (1 − drawdown)
balance after N losses = balance × (1 − risk)^N
streak drawdown = 1 − (1 − risk)^N
Drawdown and risk are written as decimals (20% = 0.20).
Worked example
A 20% drawdown on a $10,000 account leaves $8,000. To return to $10,000 you need $2,000 on $8,000: 0.20 ÷ 0.80 = 25%.
| Drawdown | Gain to recover |
|---|---|
| 10% | 11.1% |
| 20% | 25% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100% |
| 75% | 300% |
Now a losing streak. Risking 1% per trade, ten losses in a row leave 0.99^10 ≈ 90.4% of the balance: a 9.56% drawdown that needs a 10.6% gain to recover. At 2% per trade the same streak costs 18.3%, and at 5% it costs 40.1%.
How likely is a streak like that? With a 50% win rate, the chance that a particular run of ten trades is all losses is 0.5^10, about 1 in 1,000. But over 2,000 trades, the chance of meeting at least one such streak somewhere is better than even. Planning for it is part of sizing.
Using the numbers
- Decide the maximum drawdown you could tolerate, then choose a risk per trade that keeps a realistic losing streak well inside it — the position size calculator turns that risk into lots.
- The deeper the drawdown, the harder the recovery, so cutting risk early protects your ability to come back.
- Combine this with your strategy's numbers from the expectancy calculator.
Common mistakes
- Doubling risk to win it back. It shortens the path to ruin far more than the path to recovery.
- Measuring from the starting balance. Drawdown runs from the highest equity peak, including open profits that were given back.
- Assuming long streaks are rare. Even sound strategies produce long losing runs over hundreds of trades.
- Ignoring time. Recovering 25% at 2% a month takes about a year.