Drawdown Recovery Calculator
How much do you need to gain to recover from a loss? The math will surprise you.
Why this matters
Most traders think a 20% loss needs a 20% gain to break even. It doesn't. It takes 25%. And it gets worse exponentially: a 50% drawdown needs 100% to recover. This is the single most important reason why protecting your capital matters more than chasing profits.
How it works
The formula is simple but the result is counterintuitive:
Recovery % = Loss / (1 - Loss)
If you lose 20%, your new base is 80%. You need to gain 20/80 = 25% of your smaller account to get back to where you started. The chart on the right makes this asymmetry visible — watch how the recovery curve bends upward exponentially.
Real examples
$50,000 account drops to $45,000. You need an 11.1% gain — manageable, but that's already more than the 10% you lost. Every loss hits harder than it looks.
$50,000 drops to $35,000. Now you need a 42.9% gain just to break even. At 3% per month, that's over 12 months to recover — an entire year of consistent trading wiped out by one bad stretch.
$50,000 drops to $25,000. You need to double your account (100% gain) to recover. This is why professional traders never risk more than 1-2% per trade — they know recovery math is unforgiving.
The takeaway
Risk management isn't boring — it's survival. Use the Position Size Calculator to keep each trade at 1-2% risk, and you'll never face a drawdown you can't recover from.
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