Drawdown recovery calculator
Winning back a loss always needs a larger percentage gain than the loss itself, because the recovery has to be earned on a smaller account. Enter your highest balance, today's balance, the monthly return you expect and any deposits you plan, and you see the gain required and how many months it will take. The table below shows how sharply the climb steepens as drawdowns get deeper.
How far down, how far back up
Your drawdown next to the gain it takes to undo it.
The deeper the hole, the steeper the climb
Gain needed and months to recover at your monthly return, for drawdowns from shallow to severe. Your own drawdown is highlighted.
| Drawdown | Gain needed | Months at your return | Years |
|---|
How the recovery is worked out
Getting back is a matter of compounding from a smaller base. The calculator finds the gain required, then counts the months of compounding needed to reach it.
Drawdown
How far the balance is below its high point.
drawdown = (peak − now) ÷ peak
Gain required
The return on today's balance that takes it back to the high.
gain needed = peak ÷ now − 1
Months from trading only
How long monthly compounding at your return takes.
months = ln(peak ÷ now) ÷ ln(1 + monthly return)
Months with deposits
Each month the balance grows at your return and then the deposit is added, until it reaches the high.
balance = balance × (1 + return) + deposit
Drawdown recovery FAQ
Why does recovering a loss take a bigger gain?
Because the gain is earned on less money. Lose half of $10,000 and $5,000 is left; getting back to $10,000 means doubling it, a 100 percent gain. The deeper the drop, the faster the required gain rises.
What is the formula for the gain needed after a drawdown?
1 divided by (1 minus the drawdown), minus 1. A 20 percent drawdown needs 1 divided by 0.8 minus 1, which is 25 percent, and a 75 percent drawdown needs 300 percent.
How long does recovery usually take?
That depends on your monthly return. At 2 percent a month, a 30 percent drawdown takes about 18 months to recover, because the 43 percent gain compounds slowly. Deposits shorten that, and the calculator shows them separately.
Do deposits count as a recovery?
They put the balance back at its old high, but they do not win back the trading loss. The calculator shows both: when the balance returns to the peak, and when trading alone would have recovered the loss.
How do I stay out of deep drawdowns?
Risk a small, fixed slice of the account on each trade, cap how much you can lose in a day or week, and take a break after a set drawdown. Use our position size calculator to keep each trade modest.
Should I trade larger to recover faster?
Usually not. Raising risk after losses makes another, deeper drawdown more likely. Accounts usually recover by trading the same method at the same size, or less, until the balance is back.