Max Drawdown Calculator
Calculate maximum drawdown percentage and the recovery gain needed to return to peak equity.
Critical for risk assessment.
Drawdown Analysis
Maximum Drawdown (MDD) is the largest peak-to-trough decline in your account equity before a new high is reached.
Drawdown % = ((Peak Equity − Trough Equity) / Peak Equity) × 100
Recovery gain needed is always larger than the drawdown:
Recovery % = ((Peak Equity / Trough Equity) − 1) × 100
Drawdown vs. recovery needed:
- 10% drawdown → need 11.1% gain to recover
- 20% drawdown → need 25% gain to recover
- 30% drawdown → need 42.9% gain to recover
- 50% drawdown → need 100% gain to recover
- 75% drawdown → need 300% gain to recover
- 90% drawdown → need 900% gain to recover
Professional benchmarks:
- Most institutional traders cap MDD at 10–20%
- Hedge funds typically trigger review at 15–25%
- Drawdowns above 30% often indicate a broken strategy or regime change