Calculate how far capital has fallen from a peak, how much gain is required to recover, and how close you are to a drawdown limit.
The percentage gain needed to recover grows faster than the percentage loss.
The percentage gain needed to recover grows faster than the percentage loss.
| Drawdown | Value after loss | Gain required to recover |
|---|
Drawdown measures the decline from a portfolio, account or asset peak to a later value. A 20% drawdown means capital is 20% below its previous peak.
Recovery is asymmetric: after a loss, the percentage gain required to return to the old peak is larger than the percentage lost. For example, a 50% drawdown requires a 100% gain to recover.
Drawdown equals the difference between the peak value and the current or trough value divided by the peak value.
The recovery starts from a smaller capital base. A 20% loss leaves 80% of the peak, so returning from 80 to 100 requires a 25% gain.
Maximum drawdown is the largest observed peak-to-trough decline over a period. This calculator measures a selected peak and current or trough value and can compare it with a chosen drawdown limit.