Drawdown Recovery Calculator
A loss and the gain needed to undo it are not symmetric. Lose 50% and you don't need 50% back — you need 100%, because you're now compounding off a smaller base. This is why capping drawdown matters more than chasing the highest return: the deeper the hole, the more brutally the recovery math turns against you.
This is arithmetic, not a forecast: recovering a −X% loss requires a +Y% gain on the smaller balance just to break even — and nothing here says you'll get it. Deeper losses need disproportionately larger gains; past ~50% the requirement explodes.
| Drawdown | Gain to recover |
|---|---|
| −10% | +11.1% |
| −20% | +25.0% |
| −30% | +42.9% |
| −40% | +66.7% |
| −50% | +100.0% |
| −60% | +150.0% |
| −75% | +300.0% |
| −90% | +900.0% |
Gain to recover = drawdown ÷ (1 − drawdown). At a 20% loss that's 0.20 ÷ 0.80 = 25%; at 50% it's 0.50 ÷ 0.50 = 100%. It's a property of arithmetic, not of any particular market. Educational tool, not advice.
The recovery percentage is only half the cost. The other half is the time and nerve it takes to sit through the hole without quitting — a deep drawdown can last months or years, and most people sell near the bottom of one rather than wait it out. When you read a backtest, treat its worst drawdown as a stretch you'd actually have had to live through, not just a number. What counts as a good max drawdown? → How to read a backtest honestly →
A free, interactive calculator for any blog, newsletter or forum — same numbers as here, and it links back.
<iframe src="https://stratsemble.com/embed/tools/drawdown-recovery-calculator" width="460" height="380" style="border:0;border-radius:12px;max-width:100%" loading="lazy" title="Drawdown recovery calculator — Stratsemble"></iframe>A calculator shows what a rule should do on paper. A backtest is how you find the rare few that actually beat simply buying and holding — costs on, losses shown, no look-ahead — so when you build one that survives, you'll know it isn't a fake edge, and can prove it forward before you risk real money. It won't tell you you'll win — nothing honest can.