Drawdown Recovery Calculator
A 50% loss needs a 100% gain to undo. Enter your drawdown and expected return to see the gain required to get back to even and roughly how long that takes — the asymmetry that makes capital preservation the priority.
The asymmetry
Recovery % = (1 ÷ (1 − drawdown)) − 1. It is not symmetric with the loss, and the gap widens fast:
| Drawdown | Gain needed to recover |
|---|---|
| 10% | 11.1% |
| 20% | 25.0% |
| 30% | 42.9% |
| 50% | 100.0% |
| 70% | 233.3% |
| 90% | 900.0% |
Up to about 20% the arithmetic is forgiving. Past 50% it stops being a setback and becomes a different problem: a trader down 70% needs to more than triple what is left, using a strategy that just lost 70%.
Why this reframes position sizing
Everything on the position size calculator and the risk of ruin calculator follows from this table. Small losses are cheap to undo, large ones are not, and the cost of a mistake rises faster than the mistake does. Capping the downside is not caution — it is the arithmetic of staying in a position to recover at all.
The time estimate is optimistic
It assumes a constant positive monthly return with no further losing periods, which is not how recovery actually goes. In practice the drawdown that got you here is evidence that the strategy or the market has changed, and the recovery path usually contains more drawdowns. Treat the months figure as a floor.
The part that is not arithmetic
Deep drawdowns change behaviour. The urge to size up and get it back is strongest exactly when the account can least afford it, and the trades taken in that state are systematically worse than the ones taken before. A trader who can look back at what they committed to before each trade — rather than reconstructing it after — can at least see when their process has drifted. Without a sealed record, the only evidence available is a memory formed while losing.
Why the drawdown belongs beside the return
It is what a real performance standard requires. The CFA Institute's GIPS standards rest on fair representation and full disclosure across every portfolio in a composite[1] — a return presented without its worst period is an incomplete presentation, whatever the number is.
The number is the easy part
Everything above is arithmetic, and anyone opening this page gets the same answer. What no calculator can settle is whether you took the trade on these terms, or are describing — afterwards — the version of it that worked out.
That is what a trade recorder is for: the trade committed before it resolves, timestamped and sealed on the spot, on a Merkle-anchored log a stranger can check without kappi's cooperation. The plan you typed here stops being a plan you remember having. $15/month, no free tier.
Sources
Frequently asked questions
What gain do I need to recover from a 50% drawdown?
100%. The formula is (1 ÷ (1 − drawdown)) − 1, so halving the account requires doubling what remains.
Why is recovery harder than the loss?
Because the gain is computed on a smaller base. Losing 30% leaves 70, and getting from 70 back to 100 is a 42.9% gain, not 30%.
How long does it take to recover a drawdown?
log(1 / remaining fraction) ÷ log(1 + periodic return). At 2% a month, a 30% drawdown takes roughly 18 months — assuming no further losses.
At what point does a drawdown become unrecoverable?
There is no hard threshold, but past 50% the required gain exceeds 100% and grows steeply. At 90% you need a tenfold gain to get back to even.