Max Drawdown Calculator
Maximum drawdown (MDD) measures the largest peak-to-trough decline in your trading account, expressed as a percentage. It is one of the most important risk metrics in trading — a 50% drawdown requires a 100% gain just to break even. This calculator shows your current drawdown and the recovery needed.
Max Drawdown %
25.00%
Drawdown in Dollars
$2,500
Recovery Needed to Break Even
33.33%
How to use this calculator
- 1
Enter your starting or peak balance
The highest account value reached before the losing period began.
- 2
Enter your lowest balance
The lowest point your account reached during or after the losing streak.
- 3
Read your max drawdown
The calculator shows drawdown as a percentage, a dollar amount, and the gain needed to fully recover.
Formula
Max Drawdown % = (Peak − Trough) ÷ Peak × 100
Recovery Needed % = (Peak − Trough) ÷ Trough × 100Subtract the lowest balance from the peak, divide by the peak, and multiply by 100. Note that the recovery needed uses the trough (lowest balance) in the denominator — because recovery is calculated from the current low point, not the original peak. This is why a 50% loss requires a 100% gain to recover.
Worked Example
Peak balance: $10,000 Lowest balance: $7,500 Drawdown $ = $10,000 − $7,500 = $2,500 Drawdown % = $2,500 ÷ $10,000 × 100 = 25% Recovery needed = $2,500 ÷ $7,500 × 100 = 33.3% To get from $7,500 back to $10,000, you need a 33.3% gain — significantly more than the 25% you lost. This asymmetry is why limiting drawdown is critical.
Frequently Asked Questions
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