Drawdown recovery calculator

یہ قانونی صفحہ صرف انگریزی میں دستیاب ہے۔

Losses and gains are not symmetric. Lose 10% and you need 11.1% to get back; lose 50% and you need 100%. This calculator makes that asymmetry concrete for any peak and trough.

It is the single most useful piece of arithmetic for evaluating a strategy's risk: whatever a track record's average return, the maximum drawdown tells you what holding it actually felt like — and what recovery required.

Account peak$Account low$

Drawdown: 15.00%
Gain needed to recover: 17.65%

Recovery is always harder than the fall: a 20% drawdown needs a 25% gain; a 50% drawdown needs 100%. This asymmetry is the core argument for small per-trade risk.

How it works

Drawdown % = (peak − trough) ÷ peak × 100.

Required recovery % = (peak − trough) ÷ trough × 100.

The recovery percentage is always larger than the drawdown percentage, and the gap grows brutally: at 75% drawdown the account must quadruple just to break even.

Common questions

What is a "normal" drawdown for an automated strategy?

There is no normal — but there is honest and dishonest. Every real strategy has drawdowns, and a track record whose curve only rises either hasn't traded long enough or is hiding risk (for example, martingale-style sizing that banks small wins until one large loss). Judge strategies by their worst drawdown, not their best month.

Is drawdown measured on balance or equity?

Equity — including open positions. Balance only changes when trades close, so balance-based drawdown can hide large open losses. Equity drawdown reflects what the account holder actually lived through.

How does per-trade risk relate to maximum drawdown?

Losing streaks compound per-trade risk into drawdown. At 1% risk, a 10-loss streak produces roughly a 9.6% drawdown; at 3%, roughly 26%. Since streak lengths are a matter of when rather than if, per-trade risk is effectively a choice of maximum drawdown.

The thinking behind this tool is covered in Lesson 03: کسی بھی چیز سے پہلے رسک مینجمنٹ.

Related terms

Drawdown — The decline from an account's peak value to its subsequent low — the number that measures how painful a strategy is to hold.
Equity curve — The plot of account value over time — including open positions — that shows a strategy's character at a glance.
Risk per trade — The fraction of account equity a single trade can lose if its stop loss is hit.