Drawdown recovery calculator.
Losses and the gains that undo them are not symmetric. The deeper you fall, the disproportionately larger the climb back. Move the slider and watch the recovery you need bend away from the loss you took.
To get back to break even you need a gain of
+100%
A 50% loss needs a +100% gain just to break even. This is why NorthPip sizes every trade by the risk, not the hope.
Loss vs. gain needed to recover
10% loss
+11.1%
20% loss
+25%
30% loss
+42.9%
50% loss
+100%
80% loss
+400%
90% loss
+900%
Why recovery math is asymmetric
A loss and the gain needed to erase it look like they should match. They never do. The reason is simple but easy to miss: a loss is taken from your whole balance, while the recovery is earned only on what survives. Lose 50% and half your capital is gone, so the remaining half has to double, a full 100% gain, just to get you back to flat. The further you fall, the smaller the base you climb from, and the steeper the climb becomes.
That is why the curve above sits almost flat through the shallow losses and then turns into a cliff. A 10% loss only needs about an 11% gain, close to symmetric. But a 20% loss needs 25%, a 50% loss needs 100%, an 80% loss needs 400%, and a 90% loss needs a staggering 900% just to break even. The loss grows in a straight line; the gain you need to undo it accelerates away toward infinity.
What it means for position sizing
This is not a curiosity. It is the single strongest argument for sizing every trade by the risk you can accept rather than the profit you hope to make. If you keep each loss small, you stay in the shallow, forgiving part of the curve where a setback is recoverable in a trade or two. Let a loss run deep and you move into the part where the required gain is so large that a normal strategy may never earn it back. Most accounts are not destroyed by one bad idea. They are destroyed by one oversized loss, or a short run of them, that pushed the recovery math past the point of return.
The defence is unglamorous and it works. Decide in advance the most you are willing to lose on a trade. Place a stop-loss at the level that proves the trade wrong. Then size the position so that hitting that stop costs only the amount you already decided to risk, usually one to two percent of the account. Do that consistently and no single trade can drag you onto the steep part of this curve.
The risk-first philosophy
At NorthPip the recovery curve is the first thing we point to, because it reframes the whole job. Trading well is not mainly about being right more often. It is about making sure the times you are wrong stay cheap enough to come back from. A method is only as good as the worst week it has to survive, and the drawdown you allow decides whether that bad week stays a bad week or becomes a final one. Keep the losses shallow, keep the recovery math on your side, and let a sound strategy do its work over time. That is the entire game, and this calculator is the clearest way we know to feel it.
Frequently asked questions
- Why does a 50% loss need a 100% gain to recover?
- Because the gain is measured against a smaller balance. After a 50% loss, half your capital is gone, so the remaining half has to double, a 100% gain, just to get back to where you started. The loss is taken from the full balance, but the recovery is earned on what is left, which is why the two numbers are never equal.
- What is the drawdown recovery formula?
- Required gain percent equals (1 divided by (1 minus loss percent over 100), minus 1), times 100. In plain terms, you work out what fraction of your capital survives the loss, then calculate the gain that fraction needs to climb back to the original balance. The calculator above runs this for any loss you enter.
- Why does the recovery curve get so steep?
- Because the surviving balance shrinks faster than the loss grows. A 10% loss needs about 11% back, almost symmetric. A 50% loss needs 100%. An 80% loss needs 400%, and a 90% loss needs 900%. As the loss deepens, the base you recover from gets tiny, so the required gain bends away toward infinity. That asymmetry is the whole point of the tool.
- How do I avoid deep drawdowns in the first place?
- Decide the most you are willing to lose on a trade before you take it, place a stop-loss at the level that proves the idea wrong, and size the position so that hitting the stop costs only that pre-decided amount. Small, fixed risk per trade keeps any single loss, or a run of them, in the shallow, recoverable part of this curve instead of the steep part.
- Does this calculator give financial advice?
- No. It is an educational tool that does the recovery arithmetic for you. It does not know your circumstances and is not a recommendation to take or hold any trade. Use it to understand why protecting capital matters, then trade your own plan and manage your own risk.