Drawdown Calculator — Max Drawdown & Recovery Tool
Calculate the exact account damage from consecutive losses at any risk percentage, see how much gain is required to recover, and stress-test your strategy against prop firm drawdown limits. Enter your parameters below — results update instantly.
What Is Drawdown in Trading?
Drawdown is the peak-to-trough decline in account equity before a new equity high is reached. It is measured as a percentage of the peak value and represents the maximum loss a trader or strategy has experienced over a given period. A 20% drawdown means the account fell from its highest point to a value 20% lower before recovering.
Drawdown is the most honest measure of a trading strategy's risk — more informative than average return because it captures what a trader actually experiences during losing periods. A strategy that returns 30% annually with a 40% maximum drawdown is significantly riskier than one returning 20% with a 10% drawdown, even though the first looks better on paper.
The loss from the initial balance to the lowest point reached. Measures how far the account has fallen from where it started — not from its peak.
The largest peak-to-trough decline over the entire history of the account or strategy. The most widely cited drawdown metric because it captures the worst-case realised pain.
Drawdown expressed as a percentage of the highest equity point ever reached. Used by prop firms — a 10% relative drawdown on a $100k account means a $10k decline from any equity peak.
Drawdown Recovery Table — How Much Do You Need to Gain Back?
Every drawdown requires a larger percentage gain to recover — not an equal one. A 50% loss requires a 100% gain just to break even. Enter your account balance to see the exact dollar amounts at each drawdown level.
| Drawdown % | Loss ($) | Balance After | Recovery % Needed | Recovery ($) Needed | Severity |
|---|---|---|---|---|---|
| 5% | $500 | $9,500 | 5.3% | $500 | Low |
| 10% | $1,000 | $9,000 | 11.1% | $1,000 | Low |
| 15% | $1,500 | $8,500 | 17.6% | $1,500 | Low |
| 20% | $2,000 | $8,000 | 25.0% | $2,000 | Moderate |
| 25% | $2,500 | $7,500 | 33.3% | $2,500 | Moderate |
| 30% | $3,000 | $7,000 | 42.9% | $3,000 | Moderate |
| 35% | $3,500 | $6,500 | 53.8% | $3,500 | High |
| 40% | $4,000 | $6,000 | 66.7% | $4,000 | High |
| 50% | $5,000 | $5,000 | 100.0% | $5,000 | High |
| 60% | $6,000 | $4,000 | 150.0% | $6,000 | Critical |
| 70% | $7,000 | $3,000 | 233.3% | $7,000 | Critical |
| 80% | $8,000 | $2,000 | 400.0% | $8,000 | Critical |
| 90% | $9,000 | $1,000 | 900.0% | $9,000 | Critical |
Maximum Drawdown by Risk % — Strategy Simulator
Enter your strategy stats to see the expected maximum drawdown over a given number of trades. This uses a statistical model — actual results will vary but this gives you a realistic planning range.
Statistical estimate only. Based on 100 trades at 50% win rate risking 1% per trade. Actual results will vary. Use for planning — not prediction.
Drawdown Limits for Prop Firm Traders
Prop firms enforce strict drawdown rules — breaching them permanently terminates the funded account. Understanding the exact mechanic of each firm's drawdown rule is critical before placing a single trade. The two main types are fundamentally different in how they scale with your performance.
The drawdown limit is calculated from the initial balance only and never changes. A $100,000 account with a 10% static limit means you cannot go below $90,000 — ever. Even if you grow to $120,000, your floor remains $90,000.
= $100,000 × 0.90 = $90,000 (fixed)
The drawdown floor rises with your equity peak. If you grow from $100,000 to $110,000, the floor rises from $90,000 to $100,000. The limit trails behind your best balance — you can never lock in profit as permanent buffer.
If peak = $110k → Floor = $99,000
| Firm | Account | DD Type | Daily Loss Limit | Max Drawdown | Stop-Out Level |
|---|---|---|---|---|---|
| FTMO | $100k | Static | 5% | 10% | Breach = fail |
| MyForexFunds | $100k | Trailing | 5% | 12% | Trailing floor breach |
| The5%ers | $100k | Static | 4% | 8% | Breach = fail |
| Funded Next | $100k | Static | 5% | 10% | Breach = fail |
| True Forex | $100k | Trailing | 5% | 10% | Trailing floor breach |
Rules subject to change. Always verify current terms directly with the firm before trading.
How Much Gain Is Needed to Recover from Drawdown?
Recovery from drawdown is mathematically asymmetrical — it always requires a larger percentage gain than the loss itself. This asymmetry accelerates sharply as drawdown increases, which is why professional traders treat capital preservation as the primary objective, not profit maximisation.
The practical consequence: a trader who loses 50% of their account — which takes only 10 consecutive trades at 5% risk — must now double their remaining capital just to break even. That same strategy, now with a smaller account, will generate smaller absolute returns, making recovery take even longer. This compounding effect of drawdown is why limiting maximum drawdown is more important than maximising returns.
Kelly Criterion & Optimal Risk % from a Drawdown Perspective
The Kelly Criterion calculates the mathematically optimal risk percentage given your win rate and risk:reward ratio. Most professionals use ¼ Kelly to account for estimation error and sequence risk. Enter your target maximum drawdown to find the safe risk percentage.