Drawdown Recovery Calculator
Calculate the return percentage needed to recover from a drawdown. Formula: R = D/(1−D). Optionally estimate how many consecutive winning trades you need at a given risk per trade.
Peak-to-trough decline (e.g. 20 = 20% drawdown)
Assumed gain per winning trade (compound). Used to estimate consecutive wins needed.
After a 20% drawdown, you need this return on remaining capital to get back to the peak
At 1% risk per trade (compound), you need this many consecutive wins to recover
Formula: R = D/(1−D). If you lose D of your capital, remaining is (1−D). To reach 1 again, (1−D)(1+R) = 1, so R = D/(1−D). Consecutive trades assume each win adds your risk % to current capital (compound growth).
What is drawdown recovery?
A drawdown is the decline from a peak to a trough in your account or portfolio. Recovery return is the percentage gain you need on the remaining capital to get back to the previous peak. Because you are working from a smaller base after a drawdown, the required return is always larger than the drawdown percentage. For example, a 20% drawdown requires a 25% return to recover (0.20/0.80 = 0.25).
How to use this calculator
- Drawdown (%): Enter your peak-to-trough decline as a percentage (e.g. 20 for 20%).
- Risk per trade (%): Optional. Enter the percentage you risk or expect to gain per winning trade (e.g. 1 for 1%). The tool then estimates how many consecutive winning trades at that rate would be needed to recover.
Why use our drawdown recovery calculator?
All calculations run in your browser—no server round-trip—so you get instant results. Use it to set realistic recovery targets, plan position sizing after a drawdown, or see how many consecutive wins you would need at different risk levels. The formula R = D/(1−D) is exact for percentage drawdown and recovery; the consecutive-trades estimate assumes compound growth at your chosen risk per trade.
Frequently asked questions
Why is the recovery return higher than the drawdown?
After a drawdown you have less capital. A 20% loss leaves 80% of your capital; to get back to 100%, that 80% must grow by 25% (0.80 × 1.25 = 1). So the required return R = D/(1−D) is always greater than D.
What does “consecutive winning trades” mean?
It is an estimate of how many trades in a row would need to be winners (each adding your risk % to current capital, compounded) to grow your account from (1−D) back to 1. It assumes a fixed risk/reward per trade and is for planning only—real trading involves variance and no guarantee of consecutive wins.
Is the formula the same for any drawdown size?
Yes. R = D/(1−D) holds for any drawdown D between 0 and 1. Larger drawdowns require much larger recovery returns (e.g. 50% drawdown needs 100% return to recover).
Disclaimer: This calculator is for educational and informational purposes only. Recovery estimates are mathematical and do not guarantee future results. Trading involves risk; manage position size and consult a qualified advisor as needed.
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