Drawdown Calculator
Drawdown Settings
Your account balance before the loss
Percentage of capital lost
Recovery Analysis
Money lost from drawdown
Current account balance
Profit needed to recover
Quick recovery possible (at 5%/month)
You need 0.0x more gain than loss
Drawdown vs Recovery Chart
| Drawdown | Recovery Needed | Difficulty |
|---|---|---|
| -10% | +0.0% | Manageable |
| -20% | +0.0% | Moderate |
| -25% | +0.0% | Moderate |
| -30% | +0.0% | Challenging |
| -40% | +0.0% | Challenging |
| -50% | +0.0% | Challenging |
| -60% | +0.0% | Very Difficult |
| -70% | +0.0% | Very Difficult |
| -80% | +0.0% | Extremely Difficult |
| -90% | +0.0% | Extremely Difficult |
Key Drawdown Examples
Manageable recovery needed
Double your remaining capital
Nearly impossible to recover
Understanding Drawdowns
What is a Drawdown?
A drawdown is the peak-to-trough decline in your account balance. It measures the maximum loss from a previous high point before reaching a new peak.
Asymmetric Nature
Losses and gains are not symmetric. A 50% loss requires a 100% gain to break even. This is why capital preservation is paramount in trading.
Risk Management
Professional traders limit drawdowns to 10-20% maximum. Use stop losses, position sizing, and diversification to protect your capital.
Recovery Strategy
After a drawdown, reduce position sizes and focus on high-probability setups. Don't revenge trade or try to recover losses quickly.