Drawdown Calculator
Measure peak-to-trough decline and the gain needed to recover from it.
Please note: Trading carries substantial risk of loss. These calculators are planning tools, not trading advice, and no position sizing method prevents losses.
What the Drawdown Calculator does
Drawdown measures how far equity falls from a peak before making a new high. The recovery maths is brutally asymmetric — losses compound against you, so limiting drawdown protects returns more effectively than maximising them.
Formula
Drawdown % = (Peak − Trough) ÷ Peak × 100Recovery % = (Peak − Trough) ÷ Trough × 100
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Input method | one of 2 options | Yes | — |
| Peak equity | selected currency | In some modes | Accepts 0 or more. Shown Input method is Peak and trough values. |
| Trough equity | selected currency | In some modes | Accepts 0 or more. Shown Input method is Peak and trough values. |
| Equity curve | text | In some modes | Separate values with commas, spaces or new lines. Shown Input method is Equity curve values. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Input method and Currency.
- Fill in the remaining inputs the form shows for your choice.
- Select Calculate.
Worked example
An account falls from $50,000 to $35,000.
- Peak
- 50000
- Trough
- 35000
A 30% drawdown requiring a 42.86% gain to return to the peak.
Frequently asked questions
What drawdown is acceptable?
Under 20% is comfortable for most traders. Beyond 30%, the psychological pressure and the recovery arithmetic both become serious problems.
Why does a 50% loss need a 100% gain?
Because the gain is calculated on the smaller remaining balance. Half of $100 is $50, and getting back to $100 from $50 means doubling.
Method and sources
Method. Peak-to-trough decline as a percentage of the peak, with the gain required to recover it.
Assumptions
- The series entered captures the actual peak and trough of the period.
Limitations
- Recovery is asymmetric and the asymmetry accelerates: a 50% fall needs 100% to recover, a 75% fall needs 300%. This is the strongest argument against sizing that permits deep drawdowns.
- Maximum drawdown is a historical worst case, not a bound. The largest fall yet observed is routinely exceeded later.
- Duration matters as much as depth — a shallow drawdown lasting years tests conviction more than a sharp one that recovers.