Drawdown Calculator
See how many losses in a row reach a given drawdown at your risk per trade, what gain recovers it, and how likely that streak is.
Losses in a row to reach a 20% drawdown
12
Gain to recover 25.0%
Losses in a row to reach a 20% drawdown
12
Gain to recover 25.0%
- Gain needed to recover from 20%
- 25.0%
- Chance of that streak in 500 trades
- 5.8%
- Losses in a row to reach 50%
- 35
- Balance after 12 losses
- $19,617.92
How to calculate maximum drawdown from a losing streak
When each trade risks a percentage of the current balance, losses compound on a shrinking account. The streak needed to reach a drawdown comes straight from that compounding, with no limit on how long the streak can be.
Recovery is the harder number, because the gain has to be earned on a smaller balance. A 20% drawdown takes a 25% gain to recover, and a 50% drawdown takes 100%. This calculator also gives the exact chance of that streak over the number of trades you enter, assuming each trade is independent.
Drawdown after n losses = 1 − (1 − risk %)ⁿ. Gain to recover = drawdown ÷ (1 − drawdown). Losses to reach a drawdown = ln(1 − drawdown) ÷ ln(1 − risk %), rounded up.
Worked example
At 2% risk per trade, eight straight losses take the account down 14.9%, and recovering takes a 17.5% gain. At 5% risk, the same eight losses mean a 33.7% drawdown.
A 20% limit at 2% risk is reached on the 12th straight loss, since 11 losses leave you at 19.9%. Change the win rate and the number of trades to see how likely that streak is.
What the result does not account for
- Drawdowns made of losses mixed with small wins, which is how most real ones happen.
- Trades that lose more than the planned risk because of gaps and slippage.
- Losing streaks that cluster, since a strategy can stop working for a while. The streak odds assume every trade is independent.
Frequently asked questions
How many consecutive losses should I plan for?
Use the streak odds on this page with your own win rate. At a 50% win rate, the chance of 10 straight losses somewhere in 1,000 independent trades is about 38%, so a streak like that is not a rare event at high trade counts.
Why is recovery from a drawdown so hard?
Because the gain is earned on a smaller balance. After losing 50% you have half your money, so a 50% gain only gets you back to 75% of where you started, and it takes 100% to recover.
Related calculators
- Day Trading SimulatorRun 1,000 randomized trade sequences from your win rate and trade size, and read the median, the unlucky tenth and the chance of ending down.
- Kelly Criterion CalculatorFind the growth-maximizing share of your account to risk from your win rate and payoff ratio, along with half and quarter Kelly.
- Trade Risk CalculatorSet a stop at a chart level or a percentage from entry and see how many shares fit your risk limit and how large that position is against your account.
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