How to use the Drawdown Recovery Calculator
- Enter the starting equity or high-water mark you want to recover to.
- Enter the current equity.
- Read the drawdown percentage and required recovery gain.
- Use the required gain to decide whether risk should be reduced.
- Recalculate whenever equity changes materially.
Formula
Drawdown % = (Starting equity - Current equity) / Starting equity x 100
Recovery gain % = (Starting equity - Current equity) / Current equity x 100Example
A $10,000 account at $8,500 is down 15%. It needs a 17.65% gain from the current equity to recover to $10,000.
What to watch
- Recovery gain grows faster as drawdown deepens.
- The calculator uses equity, not closed balance, because open losses still affect recovery math.
- A recovery plan should include risk reduction, not only a higher return target.
Frequently asked questions
Why is the recovery gain larger than the drawdown?+
After a loss, the account base is smaller. A 10% gain on a smaller base does not recover a 10% loss from the original base.
Should I use balance or equity?+
Use equity when open trades matter. Use balance only for a closed-trade snapshot.
What drawdown is dangerous?+
Danger depends on rules, leverage, strategy variance, and psychology. The math gets much harder beyond deep drawdowns.