Maximum Drawdown Calculator
Paste an equity curve and find the largest peak-to-trough fall, the current drawdown, and the gain required to recover.
Last reviewed
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Drawdown is the statistic that decides whether a strategy is tradeable by a particular person. Two strategies with identical annual returns are not equivalent if one reached it through a twelve percent maximum drawdown and the other through a forty percent one.
This measures it from an equity curve rather than from summary statistics, because drawdown depends on the order of results. Paste the balance after each trade, day or week, and it reports the largest peak-to-trough fall, where the curve currently stands, and what recovery requires.
Result
Maximum drawdown
14.39%
- Maximum drawdown
- $3,800
- Current drawdown
- 0%
- Current drawdown
- $0
- Peak equity
- $29,400
- Final equity
- $29,400
- Total return
- $4,400
- Total return
- 17.6%
- Gain needed to recover
- 16.81%
- Length of the drawdown
- 4
This tool is for informational and educational purposes only. It is not financial or investment advice, and past performance does not guarantee future results.
Recovering a 14.39% drawdown requires a 16.81% gain on the reduced balance. Losses and the gains that undo them are not symmetric.
Maximum drawdown is measured from the highest equity peak to the lowest point that follows it, not from the start of the series.
Equity and drawdown by point
| # | Equity | Running peak | Drawdown | Drawdown % |
|---|---|---|---|---|
| 1 | $25,000 | $25,000 | $0 | 0% |
| 2 | $25,000 | $25,000 | $0 | 0% |
| 3 | $25,900 | $25,900 | $0 | 0% |
| 4 | $26,400 | $26,400 | $0 | 0% |
| 5 | $25,800 | $26,400 | $600 | 2.27% |
| 6 | $24,100 | $26,400 | $2,300 | 8.71% |
| 7 | $23,200 | $26,400 | $3,200 | 12.12% |
| 8 | $22,600 | $26,400 | $3,800 | 14.39% |
| 9 | $23,400 | $26,400 | $3,000 | 11.36% |
| 10 | $24,800 | $26,400 | $1,600 | 6.06% |
| 11 | $26,100 | $26,400 | $300 | 1.14% |
| 12 | $27,300 | $27,300 | $0 | 0% |
How to use the maximum drawdown calculator
- Paste your equity values in order - after each trade, or at the end of each day or week.
- Enter the starting equity if the series does not begin with it.
- Read the maximum drawdown as a percentage, which is the comparable figure.
- Check the current drawdown against the maximum.
What people use this for
- Measuring the worst period a strategy has actually produced.
- Comparing two strategies on risk rather than return alone.
- Checking whether a current drawdown is within historical range.
- Meeting a maximum drawdown limit set by a funded account programme.
Worked examples
Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.
A curve with one significant setback
Weekly equity across a period with a drawdown in the middle.
- Maximum drawdown
- 14.39%
- Maximum drawdown
- $3,800
- Gain needed to recover
- 16.81%
A curve currently in drawdown
The same account after a run of losses.
- Current drawdown
- 18.71%
- Peak equity
- $29,400
- Gain needed to recover
- 23.02%
The percentage is the comparable figure
A four-thousand-dollar drawdown means nothing without the account size behind it. The percentage travels between accounts and between strategies, which is why it is the one to record.
It is also the figure that determines recovery, since the gain required is calculated on the reduced balance rather than the peak.
The historical maximum is a floor, not a ceiling
A strategy that has produced a fifteen percent maximum drawdown across two years has not established that fifteen percent is its worst case. It has established that fifteen percent happened.
Longer records produce larger maximums almost by definition, and a strategy will eventually exceed anything in its history. Planning around the observed maximum as though it were a limit is a common and expensive mistake.
Drawdown is a behavioural statistic
The reason it matters more than most return measures is that it is where strategies get abandoned. A trader who cannot sit through a twenty-five percent drawdown will not collect the returns of a strategy that produces them, whatever the backtest says.
Matching the strategy to what you can actually tolerate is a more useful exercise than maximising the return you cannot stay invested through.
Methodology and assumptions
What this calculator does, and what it deliberately does not do.
- Results are arithmetic on the numbers you enter. Nothing here predicts prices or connects to an exchange, broker or market data feed.
- Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.
This tool is for informational and educational purposes only and does not constitute financial or investment advice. Past performance does not guarantee future results.
Nothing on this website is a recommendation to buy, sell or hold any security, currency, derivative or digital asset. No price is predicted and no return is promised or implied.
Trading and investing carry the risk of substantial loss, including the loss of your entire capital. Leveraged products can produce losses that exceed your deposit. Tax treatment depends on your jurisdiction and your circumstances.
Frequently asked questions
What interval should the equity values be at?
Whatever is consistent - per trade, daily or weekly. Coarser intervals understate drawdown because they miss intra-period troughs.
Is maximum drawdown the same as my worst losing streak?
Related but not identical. A drawdown is measured peak to trough in equity and can include winning trades within it.
What drawdown is acceptable?
That is personal and this site will not suggest a figure. The honest test is what you can hold through without changing the strategy.
Does the order of values matter?
Entirely. Drawdown is a property of the sequence, not of the set of results.
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