Drawdown & Recovery Calculator

Why losses require larger percentage gains to recover

A portfolio that falls from 100 to 80 has lost 20. That 20 is 20% of the peak, and it is also 25% of the 80 that remains. Getting back to 100 means gaining 20 from 80, which is a 25% return on the reduced value. The recovery percentage is larger because the denominator is smaller.

• 10% down11.11% up
• 25% down33.33% up
• 50% down100.00% up
• 75% down300.00% up

The shorter bar is the decline. The full width is the percentage gain required to return to the same peak. A 10% decline needs about 11.11%. A 50% decline needs 100%. A 75% decline needs 300%.

Not all drawdowns are measured the same way

This calculator measures the decline between two portfolio values you type. It does not reconstruct a high-water mark from a valuation history.

Portfolio drawdown

The fall from a recorded peak to a later value. Here, both numbers are the ones you enter.

Maximum historical drawdown

The largest peak-to-trough decline across an actual series of valuations. Two observations cannot produce that figure.

Trading account drawdown

A change in account equity, which can include realised and unrealised profit and loss, deposits and withdrawals.

Prop trading drawdown

A programme rule. It may use a static threshold, a trailing high-water mark, an end-of-day balance, or intraday equity. Those rules belong on the programme drawdown calculator.

Closed trades can be grouped in the trading journal. That journal sums the trades you record. It does not know the deposits that sit between them.

Assumptions and limitations

Two values you type are enough to measure a decline from a previous peak and the larger percentage gain that would restore it. The page also lines up other drawdown depths and, if you supply a rate, an illustration of how contributions and a constant return would move the balance. None of that is a valuation history or a forecast.

How the calculation works

Monetary drawdown is the previous peak minus the current value. Drawdown percent is that gap divided by the peak. Capital remaining is the current value divided by the peak. The recovery amount is the same gap. The recovery return is the peak divided by the current value, minus one, and it is finite only when the current value is above zero. A zero balance needs new capital, because a percentage return from zero is not defined. If the current value is above the typed peak, that peak is not the high-water mark for those two figures, and the page does not show a negative drawdown as a risk result. You can enter the two values, a drawdown percent, or a monetary loss. All three use this formula. The curve plots d divided by 1 minus d, from 0% to 90% drawdown, and it is not drawn at 100%. An optional starting value only shows the change from that start. It is not a time-weighted or money-weighted return. A recovery path, when you type a rate, compounds that rate periodically and adds contributions at the end of each period. Fees, if you type them, come off the illustrated balance once a year. Two observations are not a historical maximum drawdown.

Assumptions

• The peak and the current value use the same currency and the same valuation basis. The currency label does not convert them.
• The peak is above zero and the current value is zero or positive.
• A current value above the typed peak is rejected, because that peak is no longer the high-water mark.
• A recovery path uses a constant rate you type. It is not a forecast, and a contribution is cash added, not investment growth.
• Inflation, if you type it, only restates the ending balance. It does not change the nominal path.

A worked example

A previous peak of 100 and a current value of 80 is a monetary drawdown of 20, or 20 percent. Capital remaining is 80 percent. The recovery amount is 20. The return required on the remaining 80 is 25 percent. The recovery multiple is 1.25 times the current value. A 50 percent decline needs a 100 percent gain. A current value of zero does not produce a recovery percentage.

Limitations

This is the decline between two values you type. It is not the largest peak-to-trough move in a valuation history, and it is not a prop-firm rule. The trading journal sums closed trades you record and does not know the deposits between them. Cash added after the peak changes what the current value means, and you decide whether to include it. The illustrated path can fail to reach the peak inside the horizon you set. That is a statement about those assumptions, not about every possible outcome. A nominal return to the peak does not restore purchasing power.

Change one input at a time if a result looks surprising. The arithmetic is only as careful as the numbers you type, and it does not know your broker’s contract size.

Drawdown & Recovery Calculator recalculates as you type. Reset restores the starting figures on that page. Those figures are an illustration of the arithmetic, not a market observation and not a record of anyone’s account. Copy and export repeat the same rounded results. Cash amounts on screen are shown to two decimal places. A conversion, a margin schedule, or a programme rule that you leave blank is not invented. A zero divisor, a stop on the wrong side of an entry, or a target-weight total other than 100 percent produces a written explanation instead of a blank or infinite number.