Drawdown Recovery: The Gain Needed After a Loss
Percentage losses and gains multiply, so recovering costs more than losing did. A computed lookup table and the formula behind it.
3 Nov 2026 · 4 min read
On this page
A loss of L, written as a fraction, needs a gain of L ÷ (1 − L) to get back to where you started, and that is always more than L. Lose 50% and you need +100%. Lose 20% and you need +25%. The reason is that the gain is measured on a smaller balance. This page tabulates that sum so you can look a figure up; it is arithmetic, not advice.
The formula
If the balance falls by a fraction L, it is left at 1 − L of the peak. Getting back to 1 means multiplying by 1 ÷ (1 − L), so the gain needed is 1 ÷ (1 − L) − 1 = L ÷ (1 − L). Worked once: a 20% loss is 0.20 ÷ 0.80 = 0.25, a 25% gain. The same sum in reverse tells you what a gain of G is erased by: G ÷ (1 + G).
Gain needed after a loss, 5% to 90%
Made-up start: $10,000. The last column assumes a made-up average gain of 1% of the balance per winning trade, compounding, with no losses on the way back; real recoveries are slower because they include losing trades.
| Loss | Balance left | Gain needed | Winning trades at +1% each |
|---|---|---|---|
| 5% | $9,500 | 5.3% | 6 |
| 10% | $9,000 | 11.1% | 11 |
| 15% | $8,500 | 17.6% | 17 |
| 20% | $8,000 | 25.0% | 23 |
| 25% | $7,500 | 33.3% | 29 |
| 30% | $7,000 | 42.9% | 36 |
| 40% | $6,000 | 66.7% | 52 |
| 50% | $5,000 | 100.0% | 70 |
| 60% | $4,000 | 150.0% | 93 |
| 70% | $3,000 | 233.3% | 121 |
| 80% | $2,000 | 400.0% | 162 |
| 90% | $1,000 | 900.0% | 232 |
The curve bends upwards fast. A 10% loss needs 11.1%, only a little more; a 50% loss needs 100%; a 90% loss needs 900%. Past about 30% each extra point of loss adds more than two points to the gain needed.
The other direction: what erases a gain
| Gain | Loss that erases it |
|---|---|
| +10% | 9.1% |
| +25% | 20.0% |
| +50% | 33.3% |
| +100% | 50.0% |
| +200% | 66.7% |
A gain of 100% is erased by a 50% loss. The path matters in the same way for a series: percentage gains and losses do not cancel, they multiply, so −10% then +10% leaves 99% of the start, not 100%.
Losing streaks at a fixed risk per trade
Risking a fixed percentage of the current balance on each trade, k losses in a row leave (1 − risk)k of the balance. The table shows the drawdown that produces, with the gain needed to recover in brackets. Made-up risk levels, not a suggestion of what to risk.
| Risk per trade | 5 losses in a row | 10 losses in a row | 15 losses in a row | 20 losses in a row |
|---|---|---|---|---|
| 0.5% | 2.5% (2.5%) | 4.9% (5.1%) | 7.2% (7.8%) | 9.5% (10.5%) |
| 1% | 4.9% (5.2%) | 9.6% (10.6%) | 14.0% (16.3%) | 18.2% (22.3%) |
| 2% | 9.6% (10.6%) | 18.3% (22.4%) | 26.1% (35.4%) | 33.2% (49.8%) |
| 5% | 22.6% (29.2%) | 40.1% (67.0%) | 53.7% (115.8%) | 64.2% (179.0%) |
Ten losses in a row at 1% risk is a 9.6% drawdown; at 5% it is 40.1%. How long a losing run can get without anything being wrong is a sample-size question: our simulation shows the runs a fair coin throws.
What the table does not cover
- It assumes you can get the percentage. A recovery of +100% is a statement about arithmetic, not about the market giving it to you, and costs make every step slower.
- It is about balance, not time. The trades column is the minimum under made-up, loss-free conditions.
- Fixed-percentage risk shrinks the money at risk as you lose. Fixed-lot sizing loses the same dollars each time, so its drawdown is a little deeper in percentage terms than the table shows.
How to use it
- Find your drawdown on the left, read the gain you need on the right.
- Compare it with how large your typical winning month or trade has actually been, from your own records.
- Decide in advance what size of drawdown makes you stop and review. The arithmetic says where it gets steep.
We're working on a free journal and a backtester, with no date yet. Today Trepeat is a trade copier for MT4, MT5 and cTrader, currently on demo accounts, and you can add notes, a grade and screenshots to any copied trade once it closes, with a calendar of your results.
The journal exports to Excel (.xlsx) and does not calculate drawdown or recovery figures today, so the table above is the check to run on your own figures; the journal documentation says what it holds. To measure a drawdown first, see maximum drawdown explained; the metrics overview shows how it fits with the rest. The lot size calculator turns a risk percentage into a position size.
Written by the Trepeat team.