Why does a 50% drawdown need a 100% gain to recover?

After losing half the account, the remaining capital must double to return to the starting balance. Required gain = drawdown ÷ (1 − drawdown).

How do consecutive losses compound?

Each loss is taken from the reduced balance, so remaining capital = (1 − risk per trade)^number of losses. At 2% risk, ten losses leave about 81.7% of the account.

What is a safe risk per trade?

Many traders use 1-2% per trade so a normal losing streak does not threaten the account. Higher risk raises both volatility and the risk of ruin.

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Drawdown Recovery Calculator

See the real cost of a drawdown: the gain needed to recover and the capital left after losing streaks.

Inputs

Current drawdown (%)

50%

Risk per trade (%) Consecutive losses

Results

Gain needed to recover

100%

Capital after losses: 81.71%

Recovery difficulty

Hard

Consecutive-loss stress test

Consecutive losses	Remaining capital (%)
5	90.39%
10	81.71%
20	66.76%

Formula

Required gain = drawdown ÷ (1 − drawdown); remaining capital = (1 − risk) ^ number of losses

Worked example

A 50% drawdown needs a 100% gain to recover. At 2% risk, 10 consecutive losses leave 81.7% of the account.

Calculation results are for educational purposes only and do not constitute investment advice. Always do your own research before trading.

Inputs

Results

Formula

Worked example

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