MTS Institute / Drawdown recovery calculator

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Drawdown recovery calculator

See the percentage gain you need to get back to break even after any loss.

Gain needed to recover (%) 

How it works

Losses and gains are not equal. Formula: gain needed = loss ÷ (1 minus loss). A 10 percent loss needs 11 percent to recover, a 30 percent loss needs about 43 percent, and a 50 percent loss needs 100 percent.

This is why every MTS system has a written drawdown limit.

Questions

Why is recovering from a loss so hard?

After a loss you are growing a smaller base. Each percent of gain is worth less money, so you need a bigger percent to get back.

How do I limit drawdowns?

Risk a small, fixed share of capital per trade, use stop losses, and set a maximum drawdown at which you pause and review the system.

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For education only. Results are estimates based on the numbers you enter and are not investment advice.