Losses and recoveries are not symmetric. A 10% drawdown needs an 11.1% gain to repair. A 25% drawdown needs 33%. A 50% drawdown needs 100% — a full doubling — and a 75% drawdown demands 300%. The percentages you lose and the percentages you must win back live on different scales, because every loss shrinks the base your recovery must be earned on.
This is not advanced mathematics, yet almost every newcomer plans as though a 30% drawdown can be repaired by a 30% run of good trades. The market does not owe anyone that symmetry, and the arithmetic quietly guarantees the opposite.
Why the hole deepens faster than it fills
Fall from $10,000 to $9,000 and the missing $1,000 must now be earned by a $9,000 account — an 11.1% task. Fall to $5,000 and the missing half must be earned by the remaining half: 100%. The recovery percentage is loss ÷ (1 − loss), and that denominator is the villain: the deeper the hole, the smaller the shovel.
The practical consequence is that shallow drawdowns are cheap to repair and deep ones are close to terminal. A strategy that risks little per trade keeps every drawdown in the cheap zone. A strategy that risks a lot converts an ordinary losing streak into a hole the strategy's own win rate may never climb out of.
Maximum drawdown is the honest statistic
Track records advertise returns. The number that deserves your attention first is maximum drawdown — the largest peak-to-trough fall the equity curve has ever taken. It tells you three things a return figure hides: how much pain the strategy considers normal, how close it has already come to ruin, and what you would have endured had you started on the worst possible day.
A 40% annual return with a 35% maximum drawdown is not a good strategy having a good year; it is a coin-flip wearing a suit. When you compare systems — including anything we ever publish — compare the drawdowns before the returns.
Keeping the hole shallow
Everything in this lesson argues for the same three habits: risk a small, fixed fraction per trade; respect the correlation between your open positions so three trades cannot dig one deep hole together; and judge every system by the drawdown it asks you to sit through, not the return it dangles. The traders who last are not the ones who recover from deep drawdowns — they are the ones who never let the arithmetic get that expensive.