Risk analysis tool
Drawdown Recovery Calculator
Calculate the return needed to bring your capital back to its original level after a fall. Enter an assumed monthly return and you also get the time it takes.
- No registration
- Free
- Calculated in your browser
See the path back to the original level
Result
Return needed to recover
-%
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Remaining capital
-%
Recovery multiple
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Time to recover
- mo.
Difficulty:
-
-
Depth of the drawdown
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Balance on the way back
How the balance moves after the fall while compounding at the assumed monthly return. The dashed line marks the original level of capital.
Return required by drawdown
The return needed for each level of fall
The deeper the fall, the faster the required return accelerates
| Drawdown | Return required | Difficulty | |
|---|---|---|---|
| 5% | 5.26% | Low | |
| 10% | 11.11% | Low | |
| 15% | 17.65% | Medium | |
| 20% | 25.00% | Medium | |
| 25% | 33.33% | Medium | |
| 30% | 42.86% | Medium | |
| 35% | 53.85% | High | |
| 40% | 66.67% | High | |
| 45% | 81.82% | High | |
| 50% | 100.00% | High | |
| 55% | 122.22% | Extreme | |
| 60% | 150.00% | Extreme | |
| 65% | 185.71% | Extreme | |
| 70% | 233.33% | Extreme | |
| 75% | 300.00% | Extreme | |
| 80% | 400.00% | Extreme | |
| 85% | 566.67% | Extreme | |
| 90% | 900.00% | Extreme |
How to read this result
What a drawdown is
The percentage by which capital fell at its worst. When you look at an EA's results, check whether that maximum is inside what you can accept.
What the required return is
The return needed to bring the reduced capital back to its original level. It is always larger than the fall itself.
Points to watch
The recovery period is a theoretical figure that assumes the same monthly return throughout. Raising your lot size to win it back makes the fall deeper still.
Method and specification
Formula
Required return = (1 / (1 - drawdown) - 1) x 100. The recovery multiple is 1 / (1 - drawdown).
When to use it
Judging whether an EA's maximum drawdown is acceptable / Planning your way back after a loss / Backing up the risk percentage you choose
Notes
You can enter a drawdown of 0-90%. The recovery period is the number of months when compounding at the same monthly return, shown as 360+ beyond 360 months.
Related tools
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Lot calculator
Work out the optimal lot from your balance and risk percentage.
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Risk/Reward
Check the risk-reward ratio and the win rate it requires.
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Compound calculator
Chart how a balance grows from a return rate and a period.
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Margin calculator
Check the required margin, margin level and stop-out price.
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Frequently Asked Questions
Why does recovery need a bigger percentage than the fall?
Because after a fall the capital the percentage is calculated on has itself shrunk. A 20% fall turns 1,000,000 into 800,000, and bringing that 800,000 back to 1,000,000 needs 200,000 of profit, which is 25% of 800,000. The deeper the fall, the smaller the capital left, so the return you need grows sharply.
Is there a guideline for an acceptable drawdown?
Up to 10% you recover with 11.1% of profit, but a 50% fall needs 100% (doubling your capital) and a 70% fall needs 233%. Beyond roughly 20-30%, recovery is generally considered no longer realistic. When choosing an EA, check that its maximum drawdown sits inside that range.
How is the recovery period calculated?
It is the number of months to return to your original capital if you compound at the assumed monthly return you entered. It repeats balance x (1 + monthly return) once per month and shows the month at which the original capital is reached. Anything beyond 360 months is shown as 360+.
Once your money management is settled, the next step is choosing an EA.
Browse free EAs and the rankings to compare the approach that suits you.