Losses are asymmetric: losing 50% requires gaining 100%. Calculate the recovery needed and simulate a losing streak.
| Drawdown | You need to gain | |
|---|---|---|
| 5% | +5.3% | |
| 10% | +11.1% | |
| 15% | +17.6% | |
| 20% | +25% | |
| 25% | +33.3% | |
| 30% | +42.9% | |
| 40% | +66.7% | |
| 50% | +100% | |
| 60% | +150% | |
| 75% | +300% | |
| 90% | +900% |
Educational tool. Results are indicative and are not financial advice. Always verify values with your broker.
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If you lose a percentage d of your account, you need to gain d ÷ (1 − d) to get back to where you started. At 10% that is 11.1%; at 30%, 42.9%; at 50%, 100%.
That is why limiting risk per trade is so important. Risking a fixed 1% of the current balance, 10 losses in a row take you to a drawdown of about 9.6%; risking 5%, the same 10 losses would mean roughly 40%.
FormulaRecovery = 1 ÷ (1 − Drawdown) − 1Because gains are calculated on an already reduced capital. After losing 50%, you start from 5,000 instead of 10,000 and need to double it.
It depends on your win rate. With a 50% win rate, streaks of 5 to 7 losses in a row are common over hundreds of trades. Size your risk to survive them.
It is personal. Many funded accounts use limits between 5% and 10%. Defining your limit before trading is part of a good plan.