Drawdown Recovery Calculator
A 50% loss needs a 100% gain to break even. That asymmetry is the single most important fact of risk management. This tool computes the exact recovery gain and recovery time for any drawdown you care about.
How the math works
Recovery gain = peak ÷ trough − 1 = 1/(1−D) − 1. Recovery time assumes monthly compounding at your return input, with optional monthly contributions added to the trough value. Contributions dominate recovery time once the drawdown is deep — at 7% returns a 50% hole takes about 10 years to fill on its own, but roughly 4 years with $1,000/month added. This is why systematic investors treat contribution capacity as a recovery weapon, not just savings.
Why losses hurt more than gains help
| Drawdown | Trough | Gain to break even | Years @ 7% (no contributions) |
|---|---|---|---|
| −10% | $90,000 | +11.1% | ~1.5 |
| −20% | $80,000 | +25.0% | ~3.3 |
| −30% | $70,000 | +42.9% | ~5.2 |
| −50% | $50,000 | +100.0% | ~10.2 |
| −70% | $30,000 | +233.3% | ~18.0 |
| −90% | $10,000 | +900.0% | ~33.8 |
Example assumes a $100,000 peak. Note the last row: a −90% drawdown is effectively unrecoverable inside a normal investing lifetime at average returns. That's the mathematical case for position sizing and stop-loss discipline — the reason systematic strategies cap single-position risk.
Who this tool is for / not for
Use it if you…
- Are sitting on an unrealized loss and deciding whether to hold, add, or cut
- Want to size how much drawdown your plan can actually survive
- Are comparing strategies by max drawdown, not just returns
Skip it if you…
- Expect it to tell you when the market has bottomed — no calculator does that
- Think average returns apply to your account (sequence risk makes real paths worse)
- Want tax-loss harvesting advice — this model ignores taxes entirely
Related tools
Watching drawdowns live beats computing them after the fact.
TradingView's server-side alerts notify you the moment a position crosses your drawdown line — phone push, no browser open. It's how we implement the discipline this page describes. The link supports this site at no cost to you.
Set up TradingView alerts →FAQ
How much gain do I need to recover from a 30% loss?
Exactly 42.9%: $100,000 falling 30% becomes $70,000, and $70,000 × 1.429 ≈ $100,000. At 7% average annual returns with no new contributions, that takes a bit over 5 years of compounding.
Why does a 50% loss need a 100% gain?
Because percentages apply to different bases. The loss subtracts from the full $100,000; the gain must be earned back from only $50,000. Every dollar lost needs two dollars of percentage gain to return. The asymmetry grows non-linearly — at −70% you need +233%.
Do contributions really speed up recovery that much?
Yes, and they're the most reliable lever. Contributions buy shares at depressed prices during the recovery window, so each dollar added works harder than a dollar at the peak. Try $0 vs $1,000/month in the calculator to see the curve steepen.
What's a "normal" max drawdown for an equity portfolio?
Broad market indexes have historically drawn down 30–55% in severe bear markets (2000–02, 2008–09, 2022). A plan that breaks at −25% is not an equity plan — it's a mislabeled allocation. Match your risk budget to the math, not to your hope.