Drawdown recovery calculator
Shows what percentage you have to earn to bring an account back after a drawdown, and how many trades or days that takes at your average return.
Gain needed
+25.0%
To recover after a 20% drawdown
Left on the account
$800.00
Lost $200.00
Asymmetry
×1.25
How many times the gain exceeds the drawdown
Days to recover
12
At a 2.0% return per period
A 20% drawdown needs a +25.0% gain: recovery always costs more than the drawdown itself. The deeper the fall, the disproportionately more you have to earn — which is why a deep drawdown matters far more to prevent than to claw back.
Gain needed to recover
| Drawdown | Gain needed | Ratio |
|---|---|---|
| 5% | +5% | ×1.05 |
| 10% | +11% | ×1.11 |
| 20% | +25% | ×1.25 |
| 30% | +43% | ×1.43 |
| 40% | +67% | ×1.67 |
| 50% | +100% | ×2.00 |
| 60% | +150% | ×2.50 |
| 70% | +233% | ×3.33 |
| 80% | +400% | ×5.00 |
| 90% | +900% | ×10.00 |
The calculation ignores deposits into the account: it shows what trading alone must produce. The number of periods assumes a steady return.
The asymmetry of percentages
A drawdown is the decline of an account from its peak. Its defining feature is that recovering costs more than losing did: the gain you need is a larger percentage than the drop itself.
The reason is the base. The drawdown is measured against the earlier, larger account, while the recovery has to be earned from the smaller balance that is left.
Gain needed = drawdown / (1 − drawdown)
| Drawdown | Gain needed | Ratio |
|---|---|---|
| 10% | +11% | ×1.11 |
| 20% | +25% | ×1.25 |
| 30% | +43% | ×1.43 |
| 50% | +100% | ×2.00 |
| 70% | +233% | ×3.33 |
| 90% | +900% | ×10.00 |
Up to 10–20% the gap is barely noticeable — which is why drawdowns of that size are considered workable. Past 50% the curve turns vertical: returning half a deposit means doubling what remains, and on most approaches that is months of work.
How long recovery takes
The calculator converts the required gain into a number of periods — trades, days, weeks or months, whichever you measure your return in. The formula is the compound interest one, solved for the number of periods.
A 20% drawdown at an average return of 2% a day closes in about 12 trading days. The same return with a 50% drawdown needs 36 days — nearly two working months without a single setback.
How to avoid a deep drawdown
- Cap the size of a single trade. A fixed small percentage of the deposit makes a run of losses painful but not destructive.
- Set a daily loss limit. It stops you rather than the market — precisely at the point where trading turns into winning it back.
- Never grow sizes into a loss without a ceiling. Money management techniques — a series-length cap in martingale, a fixed amount per series in Masaniello — exist exactly to keep a drawdown manageable.
- Measure the drawdown from the peak, not from the deposit. Otherwise a profitable account looks untroubled while it has already given back a third from its high.
FAQ
Why does a 50% loss need a 100% gain?
Because the gain is counted from the reduced balance. After losing half of $1,000 you are left with $500, and to get back to $1,000 that $500 has to double — a gain of 100%, not 50%.
What drawdown counts as normal?
A reference for disciplined trading is up to 10–20% of the deposit. Deeper than 30% is already a warning sign: such a drawdown is hard to sit through psychologically, and the recovery math works against you more sharply with every extra percent.
How quickly can a drawdown be recovered?
The calculator shows the time at a steady return: a 20% drawdown at 2% a day closes in roughly 12 trading days. In practice it takes longer — recovery usually runs alongside cautious trading at reduced sizes.
Does martingale speed up drawdown recovery?
No, it speeds up the drawdown itself. Sizes grow exactly when the account is already falling, so an attempt to win it back increases both the rate of loss and the depth of the hole. A drawdown is cheaper to close with ordinary trading at a reduced size.