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Drawdown recovery calculator
What it takes to get back to flat, in percent and in trades. The asymmetry is not a trading phenomenon and it is not an opinion — it is what percentages do, and it is the entire reason risk limits exist.
The formula
Drawdown d = 1 − (current ÷ peak)
Gain needed = 1 ÷ (1 − d) − 1
Trades needed = ln(1 ÷ (1 − d)) ÷ ln(1 + g)
- d — the fall from the peak, as a fraction. A fall to 8,000 from 10,000 is 0.20.
- g — average gain per trade as a fraction, compounding.
- The third line is a logarithm rather than a division because gains compound. Dividing 25% by 1% gives 25 trades and is wrong; the answer is 23, because each gain is taken on a slightly larger balance.
The second line is the whole subject. It is not about trading, markets, psychology or discipline. It is what happens when you take a percentage of a smaller number.
Worked: every drawdown, and what it costs to undo
From a 10,000 peak. The last three columns are the same recovery expressed as work: how many trades it takes at three ordinary levels of edge.
| Drawdown | Balance left | Gain needed | Trades at 0.5% | Trades at 1.0% | Trades at 2.0% | Reading |
|---|---|---|---|---|---|---|
| −5% | 9,500 | +5.3% | 11 | 6 | 3 | An ordinary bad patch. |
| −10% | 9,000 | +11.1% | 22 | 11 | 6 | An ordinary bad patch. |
| −15% | 8,500 | +17.6% | 33 | 17 | 9 | Most prop accounts are already dead here. |
| −20% | 8,000 | +25.0% | 45 | 23 | 12 | Most prop accounts are already dead here. |
| −25% | 7,500 | +33.3% | 58 | 29 | 15 | A quarter of good work, with no further mistakes. |
| −30% | 7,000 | +42.9% | 72 | 36 | 19 | A quarter of good work, with no further mistakes. |
| −40% | 6,000 | +66.7% | 103 | 52 | 26 | You must double what is left to return to flat. |
| −50% | 5,000 | +100.0% | 139 | 70 | 36 | You must double what is left to return to flat. |
| −60% | 4,000 | +150.0% | 184 | 93 | 47 | Realistically a different account and a different plan. |
| −70% | 3,000 | +233.3% | 242 | 121 | 61 | Realistically a different account and a different plan. |
| −80% | 2,000 | +400.0% | 323 | 162 | 82 | Arithmetically recoverable, practically not. |
| −90% | 1,000 | +900.0% | 462 | 232 | 117 | Arithmetically recoverable, practically not. |
The two rows to sit with are −20% and −50%. Twenty percent needs a 25% gain — 23 winning trades at 1% each, with nothing going wrong in between, which is months. Fifty percent needs a 100% gain: 70 consecutive 1% trades, or a year of the best trading most people ever do, just to arrive back where they started.
Why the number on your statement is probably too small
Almost every drawdown figure derived from a statement — including the one TapeSheet shows — is balance-based. It is computed from closed trades, because that is all a statement contains.
That means it cannot see where an open position went before it closed. A trade that ran 400 against you and closed 50 in profit contributes +50 to the balance curve; the 400 never appears. Your real equity drawdown — what the account was actually worth at the worst moment — was deeper, and possibly much deeper, than any statement-derived figure can show.
This matters most for exactly the people who care most about drawdown. If you hold through adverse moves, or average into losers, the gap between your balance drawdown and your equity drawdown is where the real risk lives — and no statement will show it to you. TapeSheet says so next to the number rather than in a footnote.
What this arithmetic is actually for: setting the limit in advance
Nothing on this page helps you recover. It is arithmetic about a hole that has already been dug, and its only real use is deciding how deep a hole you are willing to permit before you get near one.
That decision is made in one place: risk per trade. At 1% per trade it takes a 23-trade losing streak to reach −20%. At 5% it takes five. Same edge, same market, same trader — a different number in one field.
Questions
Why does a 50% loss need a 100% gain?
Because the percentage is taken from a smaller number the second time. Lose half of 10,000 and you have 5,000; gaining 50% of 5,000 returns 2,500, leaving you at 7,500. To get back to 10,000 from 5,000 you must add another 5,000, which is 100% of what is left. Nothing about trading causes this — it is a property of percentages, and it applies to any quantity that falls and then rises.
Is a 20% drawdown normal?
It depends entirely on how the account is risked, and the number in isolation says nothing. An account risking 0.5% a trade reaching −20% has had a genuinely bad run; one risking 5% can reach it in four trades. What makes a drawdown worrying is not its depth but whether it is larger than the strategy has produced before — which is a question about your own history, not about a general threshold.
What does “balance-based” drawdown mean, and why does it matter?
Balance-based drawdown is measured from closed trades only, so it never sees the low point an open position passed through. If a trade went 400 down before closing at 50 up, a balance curve records the 50 and the 400 never happened. Equity-based drawdown, measured tick by tick, would have caught it. Almost every statement-derived figure — including ours — is balance-based, because a statement does not contain the tick data, and it therefore understates the real depth. Anyone quoting a drawdown without saying which kind is quoting a number that could mean either.
How do prop-firm drawdown rules differ from this?
Most prop rules measure against a fixed starting balance or a trailing high-water mark rather than against your peak equity, and they usually breach on intraday equity rather than closed balance. That makes them stricter than the arithmetic here in two separate ways at once. TapeSheet’s prop tracker models the common rule shapes and states which approximation it is using next to the result.
Find your real drawdown, and when it happened
TapeSheet plots the balance curve and the drawdown underneath it, marks the deepest fall and the peak it fell from, and says plainly that the figure is balance-based and what that leaves out. Free, no signup, and the file never leaves your device.
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