Drawdown Recovery Calculator
The Math of Trading Losses
Discover why protecting capital is more important than chasing gains. See exactly how much you need to recover from any loss.
A 50% loss requires a 100% gain just to break even.
Gain Needed to Recover
+42.9%
to recover from a 30% loss
-30% loss requires +42.9% gain
1.4× harder to recover than the original loss
At 3% monthly return
From $10,000.00
30% of account
+42.9% from $7,000.00
The Lesson
A 30%+ drawdown is a major setback. Most traders can recover, but it takes discipline and patience. Focus on capital preservation.
| Loss % | Gain Needed | Difficulty | Recovery Time |
|---|---|---|---|
| -5% | +5.3% | 1.1× harder | 1.7mo |
| -10% | +11.1% | 1.1× harder | 3.6mo |
| -15% | +17.6% | 1.2× harder | 5.5mo |
| -20% | +25.0% | 1.3× harder | 7.5mo |
| -25% | +33.3% | 1.3× harder | 9.7mo |
| -30% | +42.9% | 1.4× harder | 1y |
| -40% | +66.7% | 1.7× harder | 1y 5mo |
| -50% | +100.0% | 2.0× harder | 1y 11mo |
| -60% | +150.0% | 2.5× harder | 2y 7mo |
| -70% | +233.3% | 3.3× harder | 3y 5mo |
| -80% | +400.0% | 5.0× harder | 4y 6mo |
| -90% | +900.0% | 10.0× harder | 6y 6mo |
Recovery time assumes 3% monthly compound returns
The Asymmetry of Losses
Notice the pattern: a 50% loss requires 100% gain to recover (2× harder). A 67% loss requires 200% gain (3× harder). This is why capital preservation is the first rule of trading.
Understanding Drawdowns
Why capital preservation is the first rule of trading
The formula for recovery is deceptively simple:
This creates an asymmetric relationship where losses hurt more than gains help:
- -10%needs+11.1%(1.1× harder)
- -25%needs+33.3%(1.3× harder)
- -50%needs+100%(2× harder)
- -75%needs+300%(4× harder)
Use the 1-2% Rule
Never risk more than 1-2% of your account on any single trade. This ensures you can survive 10+ consecutive losses.
Always Use Stop Losses
Define your exit before entry. A stop loss turns a potentially catastrophic loss into a manageable one.
Monitor Portfolio Heat
Track total risk across all open positions. If you have 5 positions at 2% risk each, you're risking 10% total.
Reduce Size in Drawdowns
When in a drawdown, trade smaller. This slows the bleeding and protects capital for recovery.
Diversify Entry Timing
Don't open all positions at once. Spread entries to avoid correlated losses from market moves.
Prevent Drawdowns Before They Happen
This calculator shows what happens after a loss. SwingFolio helps you prevent large drawdowns with position sizing, risk tracking, and portfolio heat monitoring.
Portfolio Heat Tracking
See total risk across all positions. Never accidentally over-expose your account.
Drawdown Analytics
Track your equity curve and max drawdown in real-time. Catch problems early.
Recovery Tracking
Monitor your recovery progress with clear milestones and projections.