Drawdown calculator
With this drawdown calculator, you can see how much your trading balance has dropped from its highest level. It can also act as a drawdown recovery calculator, which shows the percentage gain required to reach your old peak. Since your remaining balance is lower, the percentage gain needed to recover always exceeds the percentage loss you took.
Your loss, peak balance and current balance
Your account's drawdown is the percentage fall from its highest value to the level it has now. Traders refer to that highest starting point as the peak balance. It shows how much lower your money is than the highest point reached so far.
As an example, your trading account reaches a high of £1,000, then falls to £900 following a losing week. From your peak, £100 is gone, which represents a 10% drawdown.
In a deeper example, a £1,000 account drops to £500, producing a £500 loss and a 50% drawdown. You need £500 in profit from the £500 you still hold to go from £500 back to £1,000. Because you build from a smaller amount, earning £500 on a £500 balance calls for a 100% gain.
Recovering from drawdown and the gain required
You can recover from small losses much more easily than from deep drops. For example, at a 20% drawdown, you need a 25% gain on your remaining money to break even.
Once a drawdown reaches 50%, the climb back steepens fast. A 50% loss on a £500 account leaves you with £250. You then need a 100% gain on that remaining money to get back to £500. Take a different case where a £100 balance falls by £75, leaving £25. That's a 75% drawdown, and you must make £75 from just £25 to reach your peak.
| Peak balance | Current balance | Cash needed to recover | Drawdown % |
|---|---|---|---|
| £1,000 | £900 | £100 | 10% |
| £100 | £75 | £25 | 25% |
| £100 | £50 | £50 | 50% |
| £500 | £250 | £250 | 50% |
| £1,000 | £500 | £500 | 50% |
| £100 | £25 | £75 | 75% |
How do you calculate drawdown?
We calculate drawdown and recovery gain in 2 steps with your peak balance and current balance.
- For a decimal drawdown loss, take your peak balance minus your current balance, then divide that by your peak balance. For a percentage, multiply the result by 100. The formula is: loss = (peak - current) / peak.
- For the recovery gain, divide the decimal loss by 1 minus the decimal loss, which equals the share left in your account. For the required percentage gain, multiply the result by 100. The formula is: recovery gain = loss / (1 - loss).
Controlling trade size through a losing streak
Before they choose the size of their next position, many traders check their current drawdown. If you size each trade against your remaining balance, a small dip is less likely to become a deep loss.
You can use our pip calculator and lot size calculator to check a trade's cash risk before you open it. Our margin tool shows the deposit needed to hold a trade. The compounding tool shows how steady gains rebuild an account.