Trader's Second Brain
Drawdown Calculator
Calculate how much gain you need to recover from a loss. Understand the asymmetric nature of drawdowns.
USD
USD
Recovery Analysis
Gain Needed to Recover
+25%
to get back to $10,000
Drawdown
-20%
Dollar Loss
-$2,000
Need to Gain
+$2,000
Visual Comparison
Recovery needs +25% — see your real drawdown history
You calculated one drawdown. Trader's Second Brain tracks your actual drawdowns across every trade and flags when you're approaching danger zones.
The Asymmetry of Drawdowns
One of the most important concepts in trading is that losses and gains are not symmetric. A 50% loss does not require a 50% gain to recover — it requires 100%.
Recovery % = (Peak - Current) / Current × 100
Lost 20% ($10k → $8k)? You need 25% gain ($8k → $10k) to recover
Drawdown Recovery Table
| Loss | Gain to Recover | Difficulty |
|---|---|---|
| -10% | +11.1% | Easy |
| -20% | +25% | Manageable |
| -30% | +42.9% | Challenging |
| -40% | +66.7% | Difficult |
| -50% | +100% | Very Hard |
| -75% | +300% | Nearly Impossible |
| -90% | +900% | Account Blown |
Why This Matters
- Prevention > Recovery — It's easier to avoid a 20% loss than to recover from it
- Risk management is everything — Small losses (1-2%) are easily recovered
- Compounding works both ways — Losses compound against you
- Psychological impact — Large drawdowns destroy confidence and lead to revenge trading
You know the math. Are you actually staying within limits?
Trader's Second Brain tracks your real drawdowns across every trade and shows you the exact moment your risk management breaks down — before it's too late.
See your drawdown historyFrequently Asked Questions
What is drawdown in trading?
Drawdown is the peak-to-trough decline in your trading account. If your account goes from $10,000 to $8,000, that's a 20% drawdown. It measures the largest loss from a peak before a new peak is reached.
How much gain to recover from a 50% loss?
A 50% loss requires a 100% gain to recover. If you lose half ($10,000 → $5,000), you need to double your money to get back to $10,000. This asymmetry is why risk management is crucial.
What is a good maximum drawdown?
Most professional traders aim for maximum drawdown under 20%. Prop firms typically allow 5-10% daily and 10-12% overall. Anything above 30% becomes very difficult to recover from psychologically and mathematically.
How do you calculate drawdown?
Drawdown % = (Peak Value - Trough Value) / Peak Value × 100. If your account peaked at $12,000 then dropped to $9,000, drawdown = ($12,000 - $9,000) / $12,000 × 100 = 25%.
Why is drawdown important in trading?
Drawdown shows your worst-case scenario and tests your risk management. Large drawdowns are hard to recover from (50% loss needs 100% gain), damage confidence, and can lead to revenge trading. Keeping drawdowns small is key to longevity.
Drawdown math is just the start
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