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Drawdown Recovery Calculator
The gain it takes to get back to where you were, and what a losing streak does at your risk per trade.
- Gain needed to recover
- 33.3%
- Drawdown after 10 straight losses
- 18.3%
- Gain needed after that streak
- 22.4%
Each loss is taken as the set percentage of the balance at that moment, so the drawdown compounds.
How it works
- Gain to recover
1 ÷ (1 − loss) − 1- Drawdown after a streak
1 − (1 − risk)^losses
Worked example
- A 50% loss needs a 100% gain to recover: $10,000 falls to $5,000, which must double.
- Ten losses in a row at 2% risk each leave the account down 18.3%.
- Recovering 18.3% then takes a 22.4% gain.
Why losses hurt more than gains help
Each percentage is taken from a smaller balance after a loss. A 10% loss needs 11% to recover, a 30% loss needs 43%, and a 75% loss needs 300%.
This is why prop firms set maximum drawdown limits, and why most risk rules focus on keeping losses small rather than making gains large.
Questions
What is maximum drawdown?
The largest fall from a peak in the account to a later low, before a new peak. It is one of the first figures to check on any verified track record.
How likely is a long losing streak?
More than most people expect. With a 50% win rate, a run of 7 or more losses in a row is likely at some point over a few hundred trades.
How do prop firms measure drawdown?
Some measure from your starting balance (static), others from your highest balance or equity (trailing). Trailing drawdown is harder to manage.