Drawdown Calculator
Work out a drawdown from peak to low, and the gain needed to recover it, which is always larger than the loss.
Rayner5 min read24 September 2026A drawdown calculator makes one uncomfortable fact concrete. Losses and gains are not symmetrical, because a loss shrinks the balance that the recovery has to be earned on. That asymmetry is the single strongest argument for small position sizes.
The tool below works out the drawdown from a peak and low, and the gain needed to get back. Under it are the arithmetic, the standard table, the difference between account drawdown and strategy drawdown, and how losing runs feel at different risk levels.
A drawdown is the fall from an account peak to its lowest point afterwards, shown as a percentage. Recovering it always takes a larger percentage gain than the loss: down 20 percent needs 25 percent back, down 50 percent needs 100 percent, and down 90 percent needs 900 percent.
The calculator
| Drawdown | Gain needed to get back |
|---|---|
| 10 percent | 11.1 percent |
| 20 percent | 25.0 percent |
| 30 percent | 42.9 percent |
| 50 percent | 100 percent |
| 70 percent | 233 percent |
| 90 percent | 900 percent |
Enter the highest balance the account reached and the lowest point after it. The gain needed to recover is calculated from the low, which is why it is always the larger number.
Why recovery is harder than the loss
| Drawdown | Balance from 10,000 | Gain needed to recover |
|---|---|---|
| 5 percent | 9,500 | 5.3 percent |
| 10 percent | 9,000 | 11.1 percent |
| 20 percent | 8,000 | 25.0 percent |
| 30 percent | 7,000 | 42.9 percent |
| 50 percent | 5,000 | 100 percent |
| 70 percent | 3,000 | 233 percent |
| 90 percent | 1,000 | 900 percent |
The arithmetic is simply that the recovery is earned on a smaller base. Losing half an account means doubling what is left just to get back to where it started.
Risk per trade and losing runs
| Risk per trade | Five losses in a row | Ten losses in a row |
|---|---|---|
| 0.5 percent | Down 2.5 percent | Down 4.9 percent |
| 1 percent | Down 4.9 percent | Down 9.6 percent |
| 2 percent | Down 9.6 percent | Down 18.3 percent |
| 5 percent | Down 22.6 percent | Down 40.1 percent |
| 10 percent | Down 41 percent | Down 65 percent |
A strategy winning 40 percent of the time produces a run of ten losses roughly once every few hundred trades. At 1 percent risk that is a bad month. At 10 percent it is the end of the account.
Drawdown and the decision to stop
Every trading plan needs a level at which it pauses rather than presses on, decided before the drawdown happens. Chosen in the middle of one, the number is always either too tight, which locks in the loss, or too loose, which is how accounts end.
| Level | A reasonable response |
|---|---|
| Down 5 percent | Normal. Carry on. |
| Down 10 percent | Review the record, check nothing has changed in the method. |
| Down 15 percent | Halve position size until the balance recovers. |
| Down 20 percent | Stop and review properly before the next trade. |
Types of drawdown
| Type | What it measures |
|---|---|
| Absolute drawdown | The fall below the original deposit |
| Maximum drawdown | The largest peak to low fall in the whole record |
| Relative drawdown | The same, as a percentage of the peak |
| Daily drawdown | The fall within one day, used by prop firms as a hard limit |
Prop firm rules usually combine a daily limit with an overall one, which is why traders on funded accounts often risk far less per trade than their own account rules would allow.
Drawdown in a signal record
A win rate on its own says nothing. Two records can both win 60 percent of trades while one drifts up steadily and the other swings wildly.
| What to ask of any record | Why |
|---|---|
| Maximum drawdown | The worst stretch is what you have to survive |
| Longest losing run | It decides whether you would have stayed with it |
| Whether losers are published | A record with no losing trades is not a record |
| Position size assumed | Percentage returns mean nothing without it |
How to check a published record is covered in verifying signal results.
Recovering from a drawdown
- 01Cut size firstTrading smaller while confidence is low reduces the chance of making it worse.
- 02Change nothing else at onceAltering a strategy mid drawdown makes the cause impossible to identify.
- 03Check the recordIs this a normal losing run for this strategy, or something new?
- 04Set a floorA level at which you stop and review rather than keep pressing.
- 05Rebuild slowlyRaise size back in steps as the balance recovers, not in one jump.
The compounding side of the same arithmetic is in the compound calculator.
Keep reading
- Compound calculator the other side of the curve
- Lot size calculator risk per trade in practice
- Risk reward calculator win rates and losing runs
- Trading tools every calculator on the site
Frequently Asked Questions
What is a drawdown?
The fall from an account peak to its lowest point afterwards, usually shown as a percentage of the peak.
How do you calculate the gain needed to recover?
Divide the peak by the low and subtract one. A fall from 10,000 to 7,500 needs a 33.3 percent gain to get back.
Why does a 50 percent loss need a 100 percent gain?
Because the gain is earned on the smaller balance left after the loss. Half of 10,000 is 5,000, and doubling 5,000 gets back to 10,000.
What is maximum drawdown?
The largest peak to low fall in a whole trading record. It is the standard measure of how bad the worst stretch was.
What is a normal drawdown?
It depends on the strategy and risk per trade. Many professional records show maximum drawdowns of 10 to 25 percent.
How do prop firms measure drawdown?
Usually with both a daily loss limit and a maximum overall drawdown, either of which ends the account if breached.
How do I avoid large drawdowns?
Risk a small, fixed percentage per trade, avoid adding to losers, and accept that losing runs are part of any strategy.
