DanFinDrawdown Recovery Calculator
See your real odds of recovering from a drawdown, how long it takes, and the risk of blowing the account first.
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How it works
Recovering a loss takes a bigger gain than the loss itself, because you are growing back from a smaller base: a 20% drawdown needs a 25% gain, and a 50% drawdown needs a 100% gain. This calculator uses that math, then runs a Monte Carlo simulation of hundreds of random trade sequences from your win rate and average win and loss, counting how many climb back to your starting balance before hitting your firm's drawdown limit.
The drawdown type matters. A static limit is a fixed floor, so recovery only depends on your edge. A trailing limit ratchets up behind you every time your equity makes a new high, so a choppy recovery can breach it even while you are still below your starting balance, which is why trailing accounts show a lower recovery probability. An end-of-day trailing limit only moves at the close, so it sits between the two. For the bigger picture on why low-variance strategies recover more reliably, read our drawdown distribution guide.
Note: this is a simplified model. It treats each trade as independent and does not account for loss clustering, changing volatility, slippage or fees, so treat the result as an estimate, not a guarantee.
How this tool works
Method, assumptions and limits
This calculator does two things: the exact recovery arithmetic, and a Monte Carlo estimate of your realistic odds of getting back.
The arithmetic. Because a gain is made on a smaller base after a loss, recovery is asymmetric. The gain needed to return to your previous peak is gain = drawdown ÷ (1 − drawdown). A 10% drawdown needs 11.1%, a 20% drawdown needs 25%, and a 50% drawdown needs 100%.
The simulation. Knowing the required gain does not tell you how likely you are to make it, so the tool runs thousands of possible futures from your strategy. Each simulated trade is a win (plus your reward in R) or a loss (−1R) drawn from your win rate, and equity is tracked trade by trade from the drawn-down level. A path recovers if it climbs back to the old peak, and fails if it breaches the loss limit first. Across all the paths it reports how often you recover, how long it typically takes, and how often the account is lost on the way.
What it assumes, and does not do. This is a simplified model. Trades are drawn independently and identically, so it does not capture loss clustering, changing volatility, slippage or fees. Treat the result as an estimate of the odds under those assumptions, not a guarantee.
Drawdown recovery: frequently asked questions
Why do I need a bigger gain than the loss to recover?
Because you are growing back from a smaller base. Lose 20% of $50,000 and you have $40,000; to get back to $50,000 you need a 25% gain on that $40,000, not 20%. The formula is gain needed = 1 ÷ (1 − drawdown) − 1.
What does the recovery probability mean?
It is the share of simulated trade sequences that reach your starting balance again before breaching your firm's drawdown limit or running out of trades. Above 70% is a healthy edge; below 40% means the math is working against you.
How does the drawdown type change the result?
A static limit is a fixed floor, so only your edge matters. A trailing limit rises as your equity makes new highs during the recovery, so setbacks are more dangerous and the recovery probability is lower. End-of-day trailing only updates at the close, so it sits in between.
Is this a guarantee?
No. It is a statistical estimate from the numbers you enter and does not include slippage, fees, or psychology. Use it to understand your odds, not as a promise.
Where can I learn more about managing drawdown?
Read our guide on the drawdown distribution of prop firm strategies to see why smoother, low-variance strategies stay off the limit and recover more reliably.
Disclaimer: DanFin is provided for educational and informational purposes only and does not constitute financial, investment, or trading advice, nor a recommendation of any firm, product, or strategy. The simulator and calculators are simplified statistical models based on the figures you enter; their outputs are hypothetical, are not predictions, and do not guarantee future results. Trading leveraged products carries a substantial risk of loss and is not suitable for everyone. Do your own research and consider consulting a licensed professional before making any financial decision. Some links on this site are affiliate links; if you use them, DanFin may earn a commission at no extra cost to you, which never changes the results the tools give you or the content shown.