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Drawdown Calculator

Analyze drawdown recovery requirements, simulate consecutive losses, and understand risk of ruin.

1Parameters

$

2Drawdown Analysis

Recovery Needed from 20% Drawdown
+25.0%
$8,000 → $10,000
10 Consecutive Losses at 2% Risk
$9,800
$9,604
$9,412
$9,224
$9,039
$8,858
$8,681
$8,508
$8,337
$8,171
Result: $8,170.73(-18.3%)Need +22.4% to recover
Trades to 90% Account Loss
Risk/TradeTradesSeverity
1%230Low Risk
2%114Low Risk
3%76Medium
5%45Medium
10%22High Risk

📉 Drawdown Recovery Requirements

The deeper the drawdown, the disproportionately harder it is to recover. This is why protecting capital is paramount.

-10%
Need
+11%
-20%
Need
+25%
-30%
Need
+43%
-40%
Need
+67%
-50%
Need
+100%
-60%
Need
+150%
-70%
Need
+233%
-80%
Need
+400%
-90%
Need
+900%
All Trading Tools

Understanding Trading Drawdowns

A drawdown is the decline from a peak to a trough in your account balance. It measures the largest percentage drop before a new high is reached.

The Asymmetry of Losses

One of the most important concepts in trading is the asymmetric nature of losses:

  • A 10% loss requires 11.1% gain to recover
  • A 25% loss requires 33.3% gain to recover
  • A 50% loss requires 100% gain to recover (double your money)
  • A 90% loss requires 900% gain to recover

This is why capital preservation is the #1 priority in professional trading. Small, consistent losses are manageable; large drawdowns can be career-ending.

Professional Drawdown Guidelines

  • Under 10%: Normal — typical for most strategies
  • 10-20%: Concerning — consider reducing position size
  • 20-30%: Severe — stop trading and review strategy
  • Over 30%: Critical — fundamental strategy issue