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How to Use the Calculator
- Drawdown from peak: how far the account has fallen from its highest balance, as a percentage.
- Balance at the peak: the highest balance, so the result can be shown in money.
- Average gain per trade: optional. It is used to estimate how many winning trades the way back takes.
How the Recovery Gain Is Calculated
The gain needed to recover equals 1 ÷ (1 − drawdown) − 1, written as a percentage. The gain is always larger than the loss, because it is earned on a smaller balance.
For example, a 30% drawdown takes a $10,000 account down to $7,000. Getting back to $10,000 needs a gain of 42.86%, not 30%. At 50% down the account has to double, and at 90% down it has to grow tenfold.
With an average gain entered, the number of winning trades is the logarithm of 1 ÷ (1 − drawdown) divided by the logarithm of 1 + gain per trade. At a 2% gain per trade, recovering from a 30% drawdown takes about 18 winning trades in a row.
How to Read the Result
- Recovery multiple: how many times the lost percentage you have to gain back. At 30% down it is 1.43, at 50% down it is 2.
- Winning trades needed: a minimum, not a forecast. It assumes no further loss on the way.
- Table and chart: they show the gain required at every drawdown level, so you can see how fast the gap widens.
What the Estimate Leaves Out
The calculator does not know your strategy. It does not include fees, deposits or withdrawals, and real recoveries include losing trades. Its use is to show why keeping losses small matters more than making them back.
The profit simulator shows how deep a drawdown a given strategy produces, and the position size calculator limits the loss on each trade.