Contents 6
The drawdown calculator shows what percentage gain you need to get back to your starting balance after losses, and what a losing streak does to the account at your risk per trade. It’s the clearest argument for small risk: losing is easy, recovering is many times harder.
How to use the calculator
- “Losing streak” mode — enter the balance, risk per trade in percent and the number of losses in a row. The calculator returns the resulting drawdown.
- “Drawdown” mode — enter the drawdown percentage directly, e.g. from an EA report.
On the right: the gain needed to recover, the drawdown, what’s left and what’s lost, and how many 1:2 winning trades (target twice the stop) you need to recover.
Drawdown recovery formula
Required gain = Drawdown ÷ (1 − Drawdown)
After losing 50% you have half the account left, and you need to double it — a +100% gain — to get back.
A losing streak compounds rather than adds up, because each risk is taken from a smaller balance: Drawdown = 1 − (1 − Risk)N.
Example
2% risk, 10 losses in a row: 1 − 0.9810 = 18.3%. $1,000 becomes $817. Recovery needs +22.4%, or 6 winning trades with a target twice the stop.
Drawdown vs required gain
| Drawdown | Gain to recover |
|---|---|
| 10% | +11.1% |
| 20% | +25% |
| 30% | +42.9% |
| 40% | +66.7% |
| 50% | +100% |
| 70% | +233% |
| 90% | +900% |
10 losses in a row at different risk
| Risk per trade | Drawdown after 10 stops | Gain to recover |
|---|---|---|
| 1% | 9.6% | +10.6% |
| 2% | 18.3% | +22.4% |
| 5% | 40.1% | +67% |
| 10% | 65.1% | +187% |
A streak of 10 stops happens even to a good strategy with 50% winners. At 1–2% risk it’s an unpleasant but survivable episode; at 10% it’s nearly the end of the account.
How to limit drawdown
- Risk a fixed percentage — the lot size calculator sizes each trade.
- Set a daily and weekly loss limit and stop trading when it’s hit.
- Don’t average down without numbers — check the grid in the martingale calculator first.
- Choose strategies with a moderate historical drawdown — see the examples below.
FAQ
How much do I need to gain after a 50% drawdown?
+100%. You need to double the account to get back to the starting balance.
What drawdown is acceptable?
Many traders and investors cap the maximum drawdown at 20–30%. Beyond that, recovery takes too long.
Why aren’t 10 losses of 2% equal to 20%?
Each risk is taken from a smaller balance, so the drawdown is a bit less than the sum — 18.3%.
How do I get out of a drawdown faster?
Don’t raise the risk. Trying to win it back with a big lot is the most common way accounts are blown. Keep trading your system at the same risk.
