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Drawdown Calculator
Calculate your account drawdown and the percentage gain needed to recover to your peak balance
Calculate Drawdown
Enter your account balances to calculate drawdown and recovery
The highest balance your account has reached
Your current account balance
Default: recover to peak balance
What is Drawdown?
Drawdown measures the decline from your account's peak balance to its lowest point before a new peak is reached. It's one of the most important risk metrics in trading.
Types of Drawdown:
- • Absolute Drawdown: Decline from initial deposit
- • Maximum Drawdown: Largest peak-to-trough decline
- • Relative Drawdown: Maximum decline as % of peak
Professional traders and fund managers typically aim to keep maximum drawdown below 20-30% to ensure account sustainability.
Drawdown Recovery Table
The relationship between loss and recovery is non-linear. A larger drawdown requires an exponentially larger gain to recover.
| Loss % | Required Gain % |
|---|---|
| -5% | +5.26% |
| -10% | +11.11% |
| -15% | +17.65% |
| -20% | +25.00% |
| -25% | +33.33% |
| -30% | +42.86% |
| -40% | +66.67% |
| -50% | +100.00% |
| -60% | +150.00% |
| -70% | +233.33% |
| -80% | +400.00% |
| -90% | +900.00% |
Note: A 50% loss requires a 100% gain to recover. This is why risk management is crucial.
Managing Drawdown
- Set a maximum drawdown limit — Define the maximum acceptable drawdown (e.g., 15-20%) and stop trading if reached.
- Use proper position sizing — Risk only 1-2% per trade to prevent large drawdowns.
- Diversify your strategies — Multiple uncorrelated strategies can reduce overall drawdown.
- Track and analyze — Monitor your drawdown history to identify patterns and improve risk management.