LEARN
THE RECOVERY FROM A FOREX DRAWDOWN
Drawdown is the term used to describe the process of losing money while playing a game. Losses in the foreign…
Drawdown calculator
What a run of losing trades does to an account at a given risk per trade, and the gain it then takes to get back to where you started.
Result
Drawdown
18.3%
1,829.27 lost after 10 losses in a row.
- Remaining balance
- 8,170.73
- Gain needed to recover
- +22.4%
Trade by trade (10 losses)
| Loss | Lost | Balance | Drawdown |
|---|---|---|---|
| 1 | −200.00 | 9,800.00 | 2.0% |
| 2 | −196.00 | 9,604.00 | 4.0% |
| 3 | −192.08 | 9,411.92 | 5.9% |
| 4 | −188.24 | 9,223.68 | 7.8% |
| 5 | −184.47 | 9,039.21 | 9.6% |
| 6 | −180.78 | 8,858.42 | 11.4% |
| 7 | −177.17 | 8,681.26 | 13.2% |
| 8 | −173.63 | 8,507.63 | 14.9% |
| 9 | −170.15 | 8,337.48 | 16.6% |
| 10 | −166.75 | 8,170.73 | 18.3% |
This tool uses no exchange rates. Everything is calculated in your browser; nothing you enter is sent anywhere.
How it is calculated
When each trade risks a percentage of the current balance, each loss is a little smaller than the one before, so a losing run costs less than the simple total. Getting back is harder than it looks, because the recovery is earned on a smaller balance.
balance after n losses = start × (1 − risk)ⁿdrawdown = 1 − (1 − risk)ⁿgain to recover = drawdown ÷ (1 − drawdown)
Worked example
- 10,000 at 2% a trade: the first loss is 200, leaving 9,800.
- After 10 losses in a row: 10,000 × 0.98¹⁰ = 8,170.73, a drawdown of 18.3%.
- Recovering needs 0.183 ÷ 0.817 = a 22.4% gain.
Risk. These tools do arithmetic on the figures you enter. They are not advice, and unless a field asks for them they leave out spreads, commission, financing and slippage. Past results do not predict future ones. Trading leveraged currency products carries a high risk of loss. Read our financial disclaimer.