Recovery Calculator
Calculate how much you need to gain to recover from a drawdown.
Drawdown Details
⚡ Results update automatically as you type
Recovery Requirements
At 5% monthly return to recover 25% gain
A 20% loss requires a 25% gain to recover - that's 25% more effort than what was lost. This is why protecting capital is crucial.
Drawdown Recovery Table
| Drawdown | Recovery Needed | Multiplier | Difficulty |
|---|---|---|---|
| 5% | 5.26% | 1.05× | Easy |
| 10% | 11.11% | 1.11× | Easy |
| 20% | 25.00% | 1.25× | Moderate |
| 30% | 42.86% | 1.43× | Moderate |
| 40% | 66.67% | 1.67× | Hard |
| 50% | 100.00% | 2.00× | Hard |
| 60% | 150.00% | 2.50× | Extreme |
| 75% | 300.00% | 4.00× | Extreme |
| 90% | 900.00% | 10.00× | Near Impossible |
Understanding Drawdown Recovery
Why Recovery is Harder
When you lose money, you have less capital to work with. A 50% loss means you only have half your money - so you need to double it (100% gain) just to break even.
Capital Preservation
The best traders focus on not losing rather than winning big. Keeping drawdowns under 20% keeps recovery realistic. Beyond 50%, recovery becomes extremely difficult.
Risk Management Rules
Professional traders typically risk 1-2% per trade and aim for max drawdown of 10-20%. This keeps them in the "recoverable zone" even during losing streaks.
📐 Recovery Formula
Recovery % = (1 / (1 - Drawdown%)) - 1 Recovery % = Drawdown% / (1 - Drawdown%) Recovery = 0.20 / (1 - 0.20)
Recovery = 0.20 / 0.80
Recovery = 0.25 = 25%
Example - 50% Drawdown:
Recovery = 0.50 / (1 - 0.50)
Recovery = 0.50 / 0.50
Recovery = 1.00 = 100%
Frequently Asked Questions
What is a recovery calculator in forex trading?
A recovery calculator is a tool that calculates the percentage gain needed to recover from a trading loss or drawdown. Our recovery calculator helps forex traders understand how much they need to make back after a losing period to return to their original account balance.
How do I calculate recovery from drawdown?
Recovery % = Drawdown % / (1 - Drawdown %). For example, a 20% loss requires 25% gain to recover (0.20 / 0.80 = 0.25). Our recovery calculator computes this instantly and shows the difficulty multiplier for any drawdown level.
Why do I need more than 100% to recover from 50%+ losses?
Because you're calculating the gain on a smaller base. After a 60% loss, you only have 40% of your original capital. To get back to 100%, you need to grow 40% to 100%, which is a 150% increase on that smaller amount. Our recovery calculator visualizes this relationship.
What's an acceptable maximum drawdown?
Most professional traders aim to keep max drawdown under 20%. Hedge funds often have hard limits at 25-30%. Beyond 30%, recovery becomes increasingly difficult and time-consuming. A 50% drawdown is often considered a "blow up." Use our recovery calculator to see the math.
How can I limit my drawdowns?
Key strategies: (1) Risk only 1-2% per trade, (2) Use stop losses religiously, (3) Reduce position size during losing streaks, (4) Have a maximum daily/weekly loss limit, (5) Diversify across uncorrelated strategies. Our recovery calculator shows why prevention is crucial.
Should I increase risk to recover faster?
No! This is a common mistake that leads to even larger losses. After a drawdown, you should actually reduce risk until you recover. Increasing risk when emotionally compromised often leads to account destruction. The recovery calculator shows why patience is essential.
How long does recovery typically take?
It depends on your expected returns. At 5% monthly return: 20% drawdown takes ~5 months, 50% drawdown takes ~14 months. These are theoretical minimums - psychological factors often extend recovery time. Our recovery calculator estimates time based on your monthly returns.
Why is recovery asymmetric in forex trading?
Recovery is asymmetric because losses reduce your capital base, so the same dollar amount represents a larger percentage gain on the smaller balance. A 50% loss requires a 100% gain (doubling) to recover. This asymmetry is why capital preservation is priority #1 in trading.
What is the recovery formula for drawdown?
Recovery % = 1/(1 - Drawdown%) - 1, or equivalently Recovery % = Drawdown% / (100% - Drawdown%). At 20% loss, recovery = 0.20/0.80 = 25%. At 50% loss, recovery = 0.50/0.50 = 100%. Our recovery calculator applies this formula automatically.
Can I use the recovery calculator for stocks and crypto?
Yes, our recovery calculator works for any financial instrument - forex, stocks, crypto, commodities. The math of drawdown recovery is universal. Enter any percentage loss and the calculator shows the required gain to break even, regardless of asset class.