Why recovering is harder than losing
If your account falls 50%, it has half as much money to earn the loss back. You need to double it, a 100% gain, just to return to where you started. A 10% loss needs about 11.1% to recover. A 75% loss needs 300%. Each additional point of drawdown costs more to repair than the one before.
That asymmetry is the strongest argument for risk control. Cutting a drawdown from 50% to 25% reduces the gain you need from 100% to 33%, a much easier climb.
Using the calculator
Drag the drawdown slider to the loss your account has suffered or that you want to plan for. The tool shows the gain required, your balance after the loss, the amount to earn back, and how many months recovery takes at the monthly return you enter. The second chart shows how sensitive recovery time is to your return, and the table lists common drawdown levels side by side.
Percent versus dollars
Enter your peak balance to see the same figures in dollars. The percentage gain required is the same whatever your account size.
The formulas
balance after loss = peak × (1 − drawdown)
months to recover = ln(1 ÷ (1 − drawdown)) ÷ ln(1 + monthly return)Drawdown is a fraction (0.5 for 50%). Returns compound.
Losing a fraction d and then gaining the same fraction leaves you at (1 − d) × (1 + d) = 1 − d², always less than where you started.
Worked examples
The classic: lose half your account
An account falls from $10,000 to $5,000, a 50% drawdown. To get back to $10,000 it must earn $5,000, which is 100% on the $5,000 that remains.
A smaller loss recovers fast
A 20% loss needs only a 25% gain to recover. At 2% a month that takes about 11 months.
Equal loss and gain do not cancel
Lose 30% then gain 30%: 1 × 0.7 × 1.3 = 0.91. You are still down 9%. You would need to gain 42.9% to break even after a 30% loss.
Frequently asked questions
How much do I need to gain to recover from a 50% loss?
You need a 100% gain. A 50% loss leaves half your capital, and doubling it is the only way back to the original balance.
How long does it take to recover from a drawdown?
It depends on your return. At 2% a month a 30% drawdown takes about 18 months to recover. At 5% a month it takes about 7 months. The calculator shows the time for any combination.
What drawdown is too much?
There is no fixed limit. Many professional traders and prop firms cap drawdowns between 10% and 20% because beyond that recovery needs large gains. Decide your maximum before you start trading.
Is drawdown measured from the peak or the start?
From the peak. Drawdown is the fall from the highest balance reached so far. If you have never been above your starting balance, the two are the same.
Why does the gain needed grow so fast?
Because you recover from a smaller balance. The required gain is d ÷ (1 − d), which approaches infinity as d approaches 100%.
How can I reduce drawdowns?
Risk less per trade, avoid correlated positions, cut size after losses and trade strategies with shorter losing streaks. The strategy simulator shows how risk per trade changes your drawdowns.
The best recovery is the loss you avoided.
Staying out of deep drawdowns starts with reading trend strength and exhaustion.
Last updated October 2026. For education only. Not financial advice. Results depend on your inputs and cannot predict future performance.