How to use Drawdown & Recovery
Enter peak and trough values (or drawdown percent). Read the gain required to recover to the prior peak.
Example: a 40% drawdown needs a 66.7% gain
A portfolio falls from $100,000 to $60,000.
- Drawdown = ($100,000 − $60,000) ÷ $100,000 = 40.00%
- Recovery needed = $100,000 ÷ $60,000 − 1 = 66.67%
A 40% loss needs a 66.67% gain to get back to $100,000. Losses hurt more than equal-sized gains help: a 50% drop needs a 100% gain.
Formula & methodology
drawdown% = (peak − trough) / peak. recovery% = peak / trough − 1.
See why deep drawdowns need larger recoveries
A 50% loss needs a 100% gain to break even. Making that asymmetric math explicit keeps risk budgets honest before you add leverage or concentrate into a single coin.
CryptonicTools shows both drawdown and recovery percentages so “I am only down X%” is paired with “I need Y% to get back.”
Pair with allocation and rebalance tools when planning portfolios — not personalized advice. Time-to-recover is unknown; only the percent math is certain from peak to trough values.
Using recovery math without despair narratives
Recovery required is arithmetic, not a prediction of path or time. Markets can grind sideways while the math stays true.
If leverage created the drawdown, liquidation risk may arrive before any recovery. Check liquidation and position-size tools when the account is margined.
All CryptonicTools utilities are free, mobile-first, and require no account.