Drawdown Recovery Calculator

Losses and gains are not symmetric. This is the brutal arithmetic every risk plan is built around.

How it is calculated

recovery gain = 1 / (1 − drawdown) − 1

Percentages compound from a smaller base after a loss: -10% needs +11%, -30% needs +43%, -50% needs +100%, -90% needs +900%. This asymmetry is the mathematical case for small per-trade risk — shallow drawdowns are cheap to repair, deep ones consume months of edge.

Worked example

A $10,000 account down 30% holds $7,000 and needs +42.9% — about 7.3 months of a solid 5%/month edge spent repairing instead of compounding.

FAQ

What drawdown is survivable?

Mechanically anything under 100%; psychologically far less. Most professional programs treat 20-30% as the red line, beyond which required recovery demands unrealistic returns.

How do I keep drawdowns shallow?

Fixed fractional risk per trade (0.5-2%), sizing from stops, cutting size after losing streaks — the position-size calculator implements the first two.

Does this apply to leveraged accounts?

Even more: liquidation is a 100% drawdown of that margin. This math is why liquidation must never be the stop-loss.

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Free, no signup, runs entirely in your browser. Educational tool — not financial advice. Practice the setup risk-free on the MarginPad paper-trading terminal before putting real money behind it.