Drawdown Calculator
See your drawdown percentage and exactly how much you need to gain to recover back to your peak balance.
Free — no signup, no ads, instant results
Inputs
Results
Drawdown
25.00%
Dollar Amount Lost
$2500.00
Gain Needed to Recover
33.33%
Who Is This For?
Any trader who wants to understand how much their account has declined from its peak and how much they need to gain to recover. Essential for anyone evaluating strategy performance or dealing with a losing streak.
Why Drawdown Matters
Drawdown measures the decline from a peak to a trough in your account balance. It's one of the most important metrics for evaluating trading performance and risk management discipline.
The math of recovery is asymmetric: a 50% loss requires a 100% gain to break even, and a 75% loss needs a 300% return. This is why protecting capital and limiting drawdowns is more important than chasing large gains.
Use the Position Size Calculator to keep individual trade risk small, and combine it with GrandAlgo indicators to improve your win rate and reduce drawdown periods. Read more about surviving losing streaks and managing drawdown limits in prop firm challenges.
Drawdown and Recovery Math
The drawdown formula is: Drawdown % = (Peak - Current) / Peak × 100
The recovery gain needed is: Recovery % = (1 / (1 - Drawdown%)) - 1
The key insight is that recovery is always larger than the drawdown itself. A 10% loss needs an 11.1% gain to recover. A 20% loss needs 25%. A 30% loss needs 42.9%. A 50% loss requires you to double your money (100% gain). A 75% loss demands a 300% gain just to break even.
This asymmetry is why protecting against large drawdowns matters more than maximizing returns. A strategy that avoids deep drawdowns will compound more reliably than one that chases high returns but occasionally crashes.
How to Use This Calculator
1. Enter your peak account balance
This is the highest point your account has reached — the all-time high or the most recent equity peak before the decline began.
2. Enter your current balance
Input where your account stands now. The calculator will compute the drawdown from the peak.
3. Read the drawdown percentage and recovery needed
The calculator shows the exact drawdown percentage and the precise gain required to recover back to your peak balance.
4. Evaluate your strategy
Use the results to decide whether to continue your current approach or reduce risk. If the recovery needed exceeds 50%, consider cutting position size significantly.
Worked Example
Step 1: Peak balance $15,000, current balance $11,250.
Step 2: Drawdown = ($15,000 - $11,250) / $15,000 = 25%.
Step 3: Recovery needed = ($15,000 - $11,250) / $11,250 = 33.3%.
Result: You need a 33.3% gain just to get back to breakeven.
Assumptions & Edge Cases
- Measures from a single peak — does not track rolling drawdown.
- Does not account for deposits or withdrawals.
- Recovery percentage assumes no additional losses occur during recovery.
Frequently Asked Questions
A drawdown is the decline from your account's peak equity to its lowest point before recovering to a new high. If your account grows from $10,000 to $15,000 then drops to $12,000, your drawdown is 20% ($3,000 from the $15,000 peak). Maximum drawdown is the largest peak-to-trough decline in your account's history.
Most professional traders and prop firms consider 10-15% maximum drawdown acceptable. Prop firm challenges typically set hard limits at 10% total drawdown and 5% daily drawdown. Strategies with maximum drawdowns exceeding 25% are considered high-risk, and anything above 50% is likely unsurvivable for most traders psychologically and financially.
Recovery time depends on your average monthly return and the size of the drawdown. A 20% drawdown with a consistent 5% monthly return takes about 5 months to recover. A 50% drawdown at the same rate takes about 14 months. This is why preventing large drawdowns through proper position sizing is more important than chasing high returns.