Drawdown Recovery Time Calculator
Drawdowns are painful, but understanding recovery time helps set realistic expectations. If you're at 20% drawdown, you need 25% return to recover — not 20%. This calculator shows how long recovery takes based on your trading edge and helps you plan your recovery strategy.
Calculates expected recovery time, recovery probability, required win rate, and recovery trajectory. Essential for managing drawdowns and setting realistic recovery expectations.
Current drawdown from peak
Your historical win rate
Percentage of account risked per trade
Average reward per unit of risk (e.g., 2:1)
Number of trades per period
Time period for trades
Recovery Analysis
Expected Recovery Time
19.2 trades (1.9 days)
Recovery Trajectory
Shows expected account value recovery over time based on your expected return per trade. The green dashed line indicates full recovery (100%).
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Calculation Methodology
Drawdown recovery time is calculated based on your expected value per trade and the recovery required to return to your previous peak. The key insight is that recovery requires a larger percentage gain than the drawdown percentage.
Key Insight: Recovery requires a larger percentage gain than the drawdown percentage. A 20% drawdown needs 25% to recover. A 50% drawdown needs 100% (double your remaining capital). This is why drawdowns are so dangerous — recovery gets exponentially harder as drawdown increases. Focus on preventing large drawdowns rather than recovering from them.
Learn more about drawdown recovery:
Risk management guideExample Scenario
Setup: 20% drawdown, 55% win rate, 2% risk per trade, 2:1 R:R, 10 trades per day
What this means: With a 20% drawdown, you need 25% return to recover. With 1.3% expected return per trade, you need ~19 trades. At 10 trades per day, that's ~2 days. However, variance means it could take longer (worst case ~38 trades or ~4 days).
Note: This assumes consistent performance. Actual recovery depends on the sequence of wins and losses. You might recover faster (good streak) or slower (bad streak).
Common Mistakes & Warnings
- ⚠Trading aggressively to recover faster: Increasing risk or trading frequency to recover faster usually makes drawdowns worse. It increases risk of ruin and leads to emotional trading. Stick to your proven edge and let recovery happen naturally.
- ⚠Underestimating recovery requirements: A 20% drawdown needs 25% to recover, not 20%. A 50% drawdown needs 100% (double your capital). Recovery gets exponentially harder as drawdown increases. Focus on preventing large drawdowns.
- ⚠Ignoring negative expectancy: If your expected value is negative, you cannot recover. You'll lose money long-term. Improve your win rate, R:R ratio, or reduce risk before attempting recovery.
- ⚠Expecting exact recovery time: Recovery time is an estimate based on expected value. Actual recovery depends on variance — you might recover faster or slower. Use estimates to set expectations, not exact timelines.
- ⚠Not accounting for psychological impact: Large drawdowns cause emotional stress, which can lead to poor decisions. Take breaks, reduce position size, and focus on consistent small wins rather than aggressive recovery.
- ⚠Comparing to others: Recovery time depends on your edge. Someone with 60% win rate and 3:1 R:R recovers faster than someone with 50% win rate and 2:1 R:R. Focus on your own recovery, not others.
Example Scenarios
Try these realistic scenarios to understand recovery time in different trading situations.
Scenario 1: Moderate Drawdown (20%)
Standard drawdown with good win rate and R:R. Recovery is achievable with patience.
What this means: With a 20% drawdown, you need 25% return to recover. With 55% win rate and 2:1 R:R, you have positive expectancy. Recovery should take ~19 trades or ~2 days at 10 trades/day. This is manageable with consistent trading.
Scenario 2: Large Drawdown (50%)
Severe drawdown requiring 100% return to recover. Much longer recovery time.
What this means: A 50% drawdown requires 100% return (doubling your account) to recover. Even with good stats (55% win rate, 2:1 R:R), recovery takes ~77 trades or ~8 days. This shows why preventing large drawdowns is critical.
Scenario 3: Low Win Rate (45%)
Lower win rate but good R:R. Recovery is slower but still possible.
What this means: With 45% win rate but 3:1 R:R, you still have positive expectancy. Recovery takes ~25 trades or ~3 days. Lower win rate is compensated by higher R:R, but recovery is slower than with higher win rates.
Frequently Asked Questions
When should I use this tool?
Use this tool when you're in a drawdown and want to understand how long it will take to recover. It helps set realistic expectations and plan your recovery strategy. Also useful before entering a drawdown to understand recovery requirements.
What is drawdown recovery?
Drawdown recovery is the process of returning your account to its previous peak value. If you're at 20% drawdown, you need 25% return to recover (not 20%). This is because losses compound — you need a larger percentage gain to recover from a percentage loss.
How is recovery time calculated?
Recovery time is estimated based on your expected value per trade. Expected value = (Win Rate × Reward) - ((1 - Win Rate) × Risk). Recovery time = Recovery Required % / Expected Return per Trade %. This is an approximation — actual recovery depends on the sequence of wins and losses.
What if my expected value is negative?
If your expected value is negative, you cannot recover with your current parameters. You need to either improve your win rate, improve your risk/reward ratio, or reduce risk per trade. Negative expectancy means you'll lose money long-term, making recovery impossible.
Why is recovery harder than the drawdown percentage?
If you lose 20%, you need 25% to recover. If you lose 50%, you need 100% to recover. This is because losses compound. A 50% loss requires doubling your remaining capital (100% gain) to get back to where you started. This is why drawdowns are so dangerous.
What's a realistic recovery time?
Recovery time depends on your edge. With 2% expected return per trade and 20% drawdown (requiring 25% recovery), you need ~12-13 trades. At 10 trades per day, that's 1-2 days. At 10 trades per week, that's 1-2 weeks. Realistic recovery takes time — don't rush it.
What if recovery takes too long?
If recovery time is too long, consider: (1) Reducing position size temporarily to preserve capital, (2) Improving your win rate or R:R ratio, (3) Taking a break to reassess your strategy, (4) Accepting the drawdown and focusing on consistent small wins rather than aggressive recovery.
How accurate is the recovery time estimate?
The estimate is based on expected value, which assumes average performance. Actual recovery depends on variance — you might recover faster (good streak) or slower (bad streak). The estimate is a guide, not a guarantee. Use it to set expectations, not exact timelines.
What's the difference between best case and worst case?
Best case assumes you win every trade (unrealistic but shows minimum time). Worst case accounts for losing streaks and variance (shows maximum realistic time). Expected case is the average. Your actual recovery will likely fall between expected and worst case.
Should I trade more aggressively to recover faster?
No — trading more aggressively (higher risk, more trades) usually makes drawdowns worse. It increases risk of ruin and can lead to emotional trading. Focus on consistent, disciplined trading with your proven edge. Recovery will come naturally if your strategy is profitable.
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