Losses and gains are not symmetric: a 50% drawdown needs a 100% gain to recover. See the recovery gain, the years to recover at an assumed return, and compound growth.
A 30% drawdown needs +42.86%; at 15% a year that takes about 2.55 years. 10,000 at 10% for 10 periods grows to 25,937.42.
A drawdown is the fall from a previous peak. Because a loss shrinks the base that any later gain is applied to, getting back to the peak takes a larger percentage gain than the loss itself. This calculator turns a drawdown into the gain needed to recover, an estimate of the years needed at an assumed annual return, and a compounding table for growth with or without regular contributions.
Drawdown is entered as a positive percentage between 0 and 100. The gain to recover is 1 ÷ (1 − drawdown) − 1: a 10% drawdown needs 11.11%, 20% needs 25%, and 80% needs 400%. The curve is gentle for small losses and steep for large ones, which is why limiting how deep losses go matters more than it first appears. The annual return used for recovery time is an assumption you supply, not a forecast. For compounding, the return is per period, contributions are added at the end of each period, and the result separates the total you contributed from the growth.
A 55% drawdown needs 1 ÷ 0.45 − 1 ≈ 122.22% to return to the peak. At an assumed 8% a year, recovery takes ln(1 ÷ 0.45) ÷ ln(1.08) ≈ 10.38 years; at 15% a year it takes about 5.71 years. For compounding, start with 5,000, earn 7% per period and add 1,000 at the end of each period. After the first period the value is 5,000 × 1.07 + 1,000 = 6,350.00, after the second 6,350 × 1.07 + 1,000 = 7,794.50, and after five periods about 12,763.50. Of that, 10,000 was contributed and about 2,763.50 is growth.
Real returns do not arrive at a steady rate, so years to recover is a smooth-line estimate; a second drawdown during the recovery resets the clock. The formulas ignore fees, taxes and withdrawals, all of which lengthen recovery. The deepest drawdown seen in a backtest is not the deepest possible one, either; a future drawdown can be larger.
The practical use is setting limits before trading. Decide the deepest drawdown you could live with, see the gain and the time it would take to undo it, and size positions so that a realistic losing streak stays well short of that point.
Reference only, not investment advice. Exchange rules (maintenance margin tiers, fee tiers, funding intervals) change; check your exchange before trading.