Drawdown recovery calculator
After a loss, the gain you need to get back is always bigger than the loss. This shows how much bigger, and how long it takes.
Calculations run in your browser. Nothing you type is sent or stored. Results are estimates for information only, not investment advice.
How it works
A fall of d (as a fraction) leaves 1 − d of the starting value. To get back to 1 you need a gain g with (1 − d) × (1 + g) = 1, so g = 1 ÷ (1 − d) − 1 = d ÷ (1 − d). At a steady yearly return r, the time is ln(1 ÷ (1 − d)) ÷ ln(1 + r) years. Both ignore fees, taxes and further falls.
Worked example
The page opens with a 50% loss on an account that peaked at 10,000. 5,000 is left, so you need a gain of 5,000, which is +100% of what is left, to reach 10,000 again. At 10% a year that takes 7.3 years. A 20% loss needs only +25%, or 2.9 years at 8% a year.
Gain needed after a loss
| Loss from the peak | Gain needed | Years at 10% a year | Years at 20% a year |
|---|---|---|---|
| 10% | +11.1% | 1.1 | 0.6 |
| 20% | +25.0% | 2.3 | 1.2 |
| 30% | +42.9% | 3.7 | 2.0 |
| 40% | +66.7% | 5.4 | 2.8 |
| 50% | +100.0% | 7.3 | 3.8 |
| 60% | +150.0% | 9.6 | 5.0 |
| 70% | +233.3% | 12.6 | 6.6 |
| 80% | +400.0% | 16.9 | 8.8 |
| 90% | +900.0% | 24.2 | 12.6 |
The numbers grow quickly past a 50% fall: a 90% loss needs +900%. That is why the size of the worst fall matters as much as the return. A fall limited to 20% needs +25% to recover; a fall of 50% needs +100%.
Questions
Why does a loss need a bigger gain to recover?
Because the gain is measured on what is left. After a 50% loss you hold half as much, so you have to double it, a gain of 100%, to get back to where you were.
How long will recovery really take?
The time shown assumes a steady return and no further falls, so treat it as a best case. Real returns are uneven: our 4-hour trend rule lost money in 46% of 30-day stretches although it made money over nine years. More on that.
Does cutting losses early help?
It shrinks the gain you must earn back, but it has a price. In our study of 8,810 paired backtests, adding an exit rule raised the yearly return in only 6.8% of pairs. On 1-hour and 4-hour bars it made the worst fall shallower in about four pairs out of five, at a median cost of 12 to 13 points of yearly return. Do stop-losses help?