Drawdown recovery table: the gain needed after a loss

A 10% drawdown needs an 11.1% gain to get back to the old high, a 20% drawdown needs 25%, and a 50% drawdown needs 100%. The required gain climbs faster than the loss, as the table shows from 5% to 75%.

The formula in one line

A drawdown is the decline in account value from a peak to a later low, stated as a percentage of the peak. Put simply, it's how far the whole account sits below its best balance, while a loss describes a single trade. The deepest drawdown over a period is the maximum drawdown.

Gain needed = drawdown ÷ (1 - drawdown).

A 10,000 dollar account that falls 20% ends at 8,000. Getting back takes 2,000, which is 25% of 8,000: the same dollars against a smaller base.

Risk per trade is what you lose when the stop is hit, as a percentage of the current balance, and holding it fixed is called fixed-fractional sizing. The losses-in-a-row columns come from ln(1 - drawdown) ÷ ln(1 - risk), rounded up: for 20% at 1% risk, ln(0.8) ÷ ln(0.99) = 22.2, so the 23rd loss crosses the line.

Why the rows past 30% are different

Up to 20%, the gain needed is at most a quarter larger than the drawdown. From 30% on, every further point of drawdown adds more than 2 points to the required gain: 50% to 60% adds 50 points, and 75% needs four times the loss.

Position size is where you feel it: at 1% risk, a 10,000 dollar account risks 100 per trade; after a 50% drawdown the same 1% risks 50, so a 2R winner pays 100 where it once paid 200. The hole is 5,000 deep, and every winner now fills it with a smaller shovel.

How long the climb takes

This is a calculation under assumptions, each yours to replace: a 40% win rate (the share of trades closed in profit), a 2:1 payoff (winners pay 2R, losers cost 1R, with R the amount risked per trade), and independent trades. Expectancy, the average result per trade, is then 0.4 × 2R - 0.6 × 1R = +0.2R. Your own log decides whether you have that edge.

With fixed-fractional sizing, results compound, so the right average is the geometric one: the steady per-trade rate that ends at the same balance as the real mix of wins and losses. At 1% risk that's 1.02^0.4 × 0.99^0.6 = 1.00189, about 0.19% per trade. Trades to recover = ln(1 ÷ (1 - drawdown)) ÷ ln(growth per trade).

The 10% hole took 22, 11 or 6 straight losses to dig, and the climb takes about 5 times as many trades. Higher risk shortens the climb in this arithmetic, and the same streak digs deeper: 11 losses in a row cost 10.5% at 1% risk and 19.9% at 2%. The table picks no risk level for you.

Real sequences scatter widely around these figures. With the same inputs, a 10% drawdown at 1% risk has about a 16% chance of still being unrecovered after 100 trades. With an expectancy at or below zero, the arithmetic has no finish line.

Trailing accounts: use the buffer

A trailing drawdown is a loss limit set a fixed distance below the highest balance or equity the account has reached. It rises with each new high and stays put on the way down. The distance from equity to that floor is your buffer, the number that belongs in the table.

Take a 50,000 dollar account with a 2,000 trailing drawdown, floor at 48,000. A 500 dollar loss shows as 1% on the statement and takes 25% of the buffer, the row that needs 33.3%: the remaining 1,500 has to grow by 500.

Two such losses are 2% of the account and 50% of the buffer, the row that needs 100%. Four put the account on the floor.

Start again at 50,000: on an intraday floor that tracks equity (balance plus open profit and loss), a trade that floats 1,200 into the green and closes flat leaves 800 of buffer, and a 500 loss then takes 62.5% of it (how open profit moves the floor).

What this means for position size

Read the table from right to left: find your longest losing streak in your risk column and read the drawdown on that row, or compute 1 - (1 - risk)^n for n losses. Plan for at least that streak, since a longer one stays possible, and set the result against the deepest row you'd accept or your account's floor.

Check the edge before you trust any climb estimate. Our break-even calculator turns your win rate, average win and average loss into expectancy per trade and the break-even win rate, where expectancy is zero. At 2:1 that's 33.3%, which is why the 40% example climbs at all.

GlanWick's free journal holds the trade record your streaks come from. From Starter, the drawdown chart shows how deep and how long the account has sat below its last high; maximum drawdown is on Pro.

Short version

Gain needed = drawdown ÷ (1 - drawdown), so 50% needs 100% and 75% needs 300%. At 1% risk, the 11th straight loss crosses the 10% line, and under the stated assumptions climbing out of a 10% drawdown takes about 56 trades. On a trailing account, run the table on the buffer, the money you can actually lose.