Risk math · Free tool
A 50% loss requires a 100% gain to recover. A 75% loss requires a 300% gain. The asymmetry between drawdown and recovery is the single most important fact in risk management — and the most consistently under-appreciated.
The compounding cost of large drawdowns. Notice how recovery requirements grow super-linearly.
| Drawdown | Capital remaining | Return needed to recover |
|---|
Recovery % = Drawdown % / (1 − Drawdown %)
Example: 30% drawdown means capital is at 70% of peak. To get back to 100% from 70% requires gaining 30/70 = 42.9%. Not 30%. The asymmetry is mathematical, not behavioural.
The streak projection answers: "if I risk X% per trade and have N consecutive losses, what is my drawdown?" Five 1%-risk losses produce ~4.9% drawdown (compounded slightly less than 5×1% due to declining base). Five 5%-risk losses produce 22.6% drawdown.
Most retail traders intuit drawdown as linear when it is non-linear. The 90% drawdown row in the asymmetry table is the most instructive: a 90% loss requires a 900% gain to recover — a return rate that essentially nobody achieves. This is why position-sizing discipline (max 2% risk per trade) is non-negotiable.
Educational tool. Performs deterministic mathematics on inputs you provide.