Drawdown and recovery aren't symmetric. The deeper the loss, the bigger the gain you need to get back to even. This calculator shows the exact numbers.
Drawdown is the percentage decline of your trading capital from its highest point (peak) to its lowest point (trough) before a new peak is reached. It is the single most honest measure of how painful a strategy can be in real life: far more useful than headline returns alone.
Recovery is the gain you need on the remaining capital to climb back to the original peak. Because the base shrinks during a drawdown, recovery is always larger than the drawdown itself, and the relationship is exponential, not linear.
When capital drops, the base of calculation shrinks too. That's why the percentage needed to recover is always larger than the drawdown itself.
Worked example: a portfolio of $10,000 drops 40% to $6,000. To return to $10,000 the remaining $6,000 must grow by $4,000, a 66.7% gain, not 40%. At 50% drawdown the recovery doubles to 100%. At 90% drawdown it explodes to 900%.
Add a few drawdowns to see how different the recovery is.
Quick reference for the most common drawdown levels and the recovery they require.
| Drawdown | Recovery | Difficulty |
|---|---|---|
| -5% | +5.3% | Easy |
| -10% | +11.1% | Easy |
| -15% | +17.6% | Easy |
| -20% | +25.0% | Easy |
| -25% | +33.3% | Medium |
| -30% | +42.9% | Medium |
| -35% | +53.8% | Medium |
| -40% | +66.7% | Medium |
| -45% | +81.8% | Hard |
| -50% | +100.0% | Hard |
| -55% | +122.2% | Very Hard |
| -60% | +150.0% | Very Hard |
| -65% | +185.7% | Very Hard |
| -70% | +233.3% | Very Hard |
| -75% | +300.0% | Very Hard |
| -80% | +400.0% | Near Impossible |
| -85% | +566.7% | Near Impossible |
| -90% | +900.0% | Near Impossible |
| -95% | +1,900.0% | Near Impossible |
| -99% | +9,900.0% | Near Impossible |
Drawdown is the percentage drop in capital from a peak to a trough before recovering. It shows how far a portfolio has fallen from its highest value.
Formula: Recovery % = Drawdown ÷ (100 − Drawdown) × 100. Example: a 50% drawdown needs 100% recovery to get back to the starting capital.
If capital drops 50%, you need a 100% gain on the remaining capital to get back to even, because recovery is calculated from the smaller remaining base, not the original capital.
Recovery is computed on the smaller remaining capital. A 20% loss leaves 80%; getting back to 100% from 80% takes a 25% gain, not 20%. The deeper the loss, the more disproportionate this becomes.
Not exactly. A loss is a realised result. Drawdown is the peak-to-trough decline of your equity curve, which includes unrealised, floating positions. A trader can hit a large drawdown without closing a single trade.
Most professional traders aim to keep maximum drawdown below 20-25%. Beyond 30% the recovery required starts to compound fast, and beyond 50% it becomes a psychological as well as mathematical problem.
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Educational tool - not financial advice.